Kapoor’s custody extended by four days till March 20
HDIL used loan sanctioned to Mack Star Marketing to pay off previous loans: ED
The sessions court in Mumbai on Monday extended the custody of Rana Kapoor, former managing director and chief executive officer of crisis-hit YES Bank, till March 20.
The Enforcement Directorate (ED) had asked for six days of custody on the grounds that Kapoor is guilty of the offence of money laundering and further interrogation is required to get to the bottom of the deals he allegedly made through a complex web of companies. The court, however, granted custody for four days.
During investigations, the probe agency found that a loan of ~202 crore was sanctioned to Mack Star Marketing, which is a joint venture between HDIL promoters Sarang Wadhawan, Rakesh Wadhawan, and former Punjab and Maharashtra Cooperative Bank chairman Waryam Singh and De Shaw group. The first three hold only 16.64 per cent shares in the entity, while the De Shaw group has the majority stake.
The ED found that HDIL used the loan sanctioned to Mack Star Marketing to pay off its previous loans. However, the loan was sanctioned to the entity with the specific purpose of renovating its office building. The investigative agency in the court alleged the property was constructed two years prior to the loan sanctioned for its renovation and was valued at ~100 crore. Also, ED has alleged that the loan was taken without the approval of the majority shareholders of the joint venture.
The investigative agency has also alleged that Kapoor had a strong relationship with HDIL promoters and sanctioned the loan to Mack Star without the knowledge or approval of De Shaw group, the majority shareholders in the JV. In March 2016, the De Shaw group had written to YES Bank saying the loans extended by the bank were ultra vires since it hadn’t approved the loans. Moreover, a commercial suit was filed by the director of the JV in the Bombay High Court detailing each of the illegal acts of Kapoor in connivance with the Wadhawans.
The investigations have revealed that Kapoor obtained illegal gratification in the form of property in New Delhi, which belonged to Gautam Thapar, promoter of Avantha group.
Kapoor’s lawyer responded that his client was being singled out and said the bank’s bad loans were 1.25 per cent of the advances when Kapoor was CEO, and all the corporates named by the Finance Minister — Anil Ambani group companies, IL&FS, Essel group companies, and Dewan Housing Finance — turned bad after Kapoor left.
Kapoor’s lawyer also said the bank’s credit committee took the decisions on loan disbursals and only he cannot be singled out. Also, on the charges that he obtained illegal property, Kapoor’s lawyer said he took upon liabilities personally and paid it off to the bank by taking a loan from Indiabulls Housing Finance. Investigations also revealed that about 78 firms owned by Kapoor’s family were being controlled and managed by Kapoor.