Rana Kapoor used YES Bank for illegal activities, says ED

Former YES Bank managing director and chief govt officer Rana Kapoor used the lender as his “personal fiefdom” to hold out unlawful actions and was the architect of a monetary fraud geared toward creating wealth for himself and his household, the Enforcement Directorate (ED) claimed in a cost sheet filed towards the co-founder.

The 62-year-old former banker, the primary MD-CEO rank govt of a personal financial institution to be charge-sheeted for suspected cash laundering, was accused of “impropriety, illegality and rampant misuse of power” in what the central company described because the hallmark of a rip-off that had been brewing for a few years.

Practices adopted by the YES Bank below Kapoor’s regime promoted a poor credit score and compliance tradition, centralisation of energy and lack of institutionalisation, placing it in a state of affairs the place its survival got here into query, mentioned the doc filed on May 6, a duplicate of which has been reviewed by Hindustan Times.YES Bank had assumed a really massive publicity (relative to its web value) to many entities that had been going through important stress and liquidity, it mentioned.

Contacted over the telephone, Kapoor’s lawyer Subhash Jadhav refused to touch upon the cost sheet.

Kapoor was arrested on March eight in reference to the illegalities at YES Bank throughout his stint as the pinnacle of the lender. The Reserve Bank of India (RBI) slapped a moratorium on the financial institution and outmoded its governing board the identical month, and co-opted State Bank of India (SBI), the nation’s largest lender, to rescue it.

The ED, which investigates cash laundering offences, has claimed that in his tenure, Kapoor was instrumental in sanctioning loans value ₹30,000 crore, out of which accounts value ₹20,000 crore was a non-performing asset.

Kapoor, it has been alleged, accepted unlawful gratification whereas granting loans and cash was diverted by these corporations.

A Mumbai court docket took cognisance of ED’s chargesheet on Saturday, summoning Kapoor, his spouse and daughters within the case of cash laundering on June 5.

The ED charged that Rana Kapoor, who co-founded the financial institution in 2004 and was MD-CEO until January 2019, had acted because the “prima donna,” “chief conspirator” and the “architect” of a rip-off geared toward diverting public cash to create wealth for himself and his household.

“Rana Kapoor perpetrated the entire scam by firstly taking money out of YES Bank under the garb of debentures and loans, by abusing his position in the bank and secondly, receiving kickbacks/gratification for the same,” the ED cost sheet mentioned.

The company has pegged the proceeds of crime at ₹5,050 crore. But it’s a advanced case of economic fraud with an online of interlinked transactions and entities and the quid professional quo will come to mild solely after thorough investigations, it mentioned.