The Enforcement Directorate (ED) has found that Yes Bank Ltd gave a Rs 200-crore loan to beleaguered Housing Development & Infrastructure (HDIL) in 2016 for a project, but the amount was allegedly diverted to repay an older loan of the lender to ensure that HDIL account is not classified as a non-performing asset (NPA).
HDIL and its promoters Rakesh Wadhawan and Sarang Wadhawan have been arrested by the agency in connection with the Rs 4,355.46 crore fraud at Punjab and Maharashtra Cooperative (PMC) Bank. The promoters of HDIL are also related to the family of Dewan Housing Finance Corporation (DHFL) promoters Kapil Wadhawan and Dhiraj Wadhawan.
According to sources, in 2015, HDIL constructed a building in suburban Mumbai and in 2016 applied for a loan with Yes Bank to renovate it. However, the money loaned by the bank was diverted to other group companies to repay earlier loans, ED has alleged.
The ED has also recorded the statement of Sanjay Chhabria, managing director of real estate firm Radius Developers, in connection with the alleged Rs 750 crore loan from Yes Bank to Belief Realtors Private Ltd , a company owned by the promoters of DHFL.
The agency found that in 2018, Yes Bank gave Rs 750 crore to Belief Realtors for redevelopment of slums at Bandra reclamation in Mumbai along with Radius Developers. Of the total loan, Yes Bank charged Rs 118 crore as processing fees and the remaining Rs 632 crore was transferred to Belief Realtors. The ED found that this money was immediately diverted to Kyta Advisers, another entity connected to DHFL promoters.
Chhabria has now told the ED that Radius Developers had not signed any agreement with Belief Realtors for redevelopment of slums at Bandra reclamation.
The ED has also expanded it probe to several other companies that got loans from Yes Bank. It has alleged that Yes Bank gave out loans of thousands of crore of rupees to various companies, a large number of them non-banking financial institutions, many of which later became stressed assets. As companies began defaulting on repayments, instead of declaring the assets as NPAs well in time and initiating recovery proceedings, Rana Kapoor allegedly conspired with the companies and got them to invest in firms run by his wife and daughters.
PMC Bank is under regulatory restrictions after the RBI found out financial irregularities in its functioning, hiding and classification of loans given to HDIL. The bank has loaned over 70 per cent of its Rs 9,000 crore in advances to HDIL.
The police has said the actions of the accused allegedly led to bank losses totaling Rs 4,355.46 crore. The ongoing investigation has found that there were nearly 44 accounts at the bank that were password-protected. A lot of money has been diverted to these accounts, linked to the Wadhawans and HDIL-linked entities, the police said.
The police is also probing the 21,049 dummy accounts created by the bank to hide its bad loans.
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