The Central Bureau of Investigation has booked Yes Bank Founder Rana Kapoor and his wife Bindhu Kapoor for receiving ₹307 crore bribe from Avantha Realty Ltd. in connection to the purchase of a 1.2-acre uber-luxe bungalow at 40, Amrita Shergill Marg, New Delhi that was valued at ₹550 crores. Yes Bank is accused of not initiating actions to recover ₹1900 crores from the Avantha Group, despite the group of companies defaulting on its payment.
Avantha Group had mortgaged the said bungalow to two banks, namely, ICICI Bank and DCB Bank and around 380 crores were outstanding in March 2016. Yes Bank rescued the realty firm with a loan of ₹400 crores. Reportedly, the outstanding dues of the realty firm towards Yes Bank stood at ₹1,333 crores and it was ineligible for a loan. Nevertheless, the bank owned by Rana Kapoor took charge of the posh property in Lutyen’s Delhi.
Interestingly, the principal loan repayment for the first year was kept at Rs 5 lakh per month. It was 100 times lower than the rental income the property was projected to fetch. When Avantha Group came under stress (₹12 crores of principal liabilities and unpaid interest) after a year later, a decision was made to sell the property.
Bliss Abode Pvt Ltd., the director of which is Bindhu Kapoor, pitched in to purchase the property at Rs 378 crore. It readily received a nod from the Management Credit Committee (MCC) and a no-objection certificate (NOC). The MCC was headed by Rana Kapoor.
Bliss Abode Pvt Ltd., where Rana Kapoor was a co-borrower, then mortgaged the bungalow to Indiabulls Housing Finance Limited in exchange for a total loan of Rs 685 crores. Out of the total loan amount, ₹310 crores of further loans were obtained from Imagine Estate Pvt Ltd and Imagine Home Pvt Ltd. As interesting as it may, both had Bindhu Kapoor as its director.
The fact that Bliss Abode Pvt Ltd. (where Kapoor was a co-borrower) bought the property (in charge with Yes Bank, the founder of which is Rana Kapoor) was a clear case of conflict of interest. This vital information was withheld from the Yes Bank Board and the MCC in violation of the bank’s code of conduct and the Companies Act, 2013.
The FIR read, “This appears to have been done with an ulterior motive to acquire the property as illegal gratification for various favours extended by Rana Kapoor to AG companies. These loans are yet to be repaid to Yes Bank Limited and there is stated to be a total outstanding of Rs 1900 crore against various credit facilities extended by YBL to AG companies by January 2020.
Earlier, the Enforcement Directorate was investigating whether a dummy company controlled by Kapoor and two of his daughters, Doit Urban Ventures, received kickbacks to the tune of ₹600 crores in return for granting a ₹4,450 crore loan to Dewan Housing Financial Corporation Limited (DHFL).
Despite the firm failing to return the money, the Yes Bank management did not initiate any action. Officials suspect that DHFL had siphoned off ₹13,000 crores (including the ₹4,450 crores Yes Bank loan) through 79 dummy companies. Kapoor is also believed to be involved in Employees’ Provident Fund (PF) where the Uttar Pradesh Power Corporation Ltd. (UPPCL) invested ₹4,100 crore worth of funds in DHFL without seeking required approval.
Rana Kapoor’s Yes Bank which is under scanner over allegations of financial irregularities prospered greatly during the UPA regime. According to the IPO filing of the bank, the Government Relationship Management (GRM) group of Yes Bank group has “developed robust relationships with over 300 entities across India”. Not limited to that, Yes Bank had also provided financial and advisory services to Ministries of the Union Government.
Such progress within the space of six and a half years is likely to raise a few eyebrows. It has also been revealed that a letter dated 1st May 2010 has emerged written by senior Congress leader Milind Deora, the then Member of Parliament, to Yes Bank chief Rana Kapoor, suggesting he buys the Rajiv Gandhi painting in Priyanka Gandhi Vadra’s possession. The Congress-Gandhi link in Yes Bank surfaced after it was revealed that founder Rana Kapoor had bought the painting for Rs 2 crore.