Yes Bank promoter Rana Kapoor and his family not only opened 78 companies to receive “kickbacks” from firms the bank gave loans to, but invested this money in as many as 40 real estate and hospitality assets across India and abroad, investigations by the Enforcement Directorate (ED) have reportedly found.
The central agency has traced documents related to these assets and properties and is currently verifying them, sources said.
According to ED sources, of the 40 properties that the Kapoors bought with the alleged kickbacks, around 28 are in India — mostly in Delhi, particularly the VIP Lutyens zone — and 12 in the UK and US.
Road zone and South Delhi. In the US and UK, companies owned by the Kapoor family made investments in hotels and clubs. In fact, a large number of their companies have real estate and hospitality subsidiaries,” an ED official said.
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He added that once they had verified the documents associated with these properties bought with the “proceeds of crime”, the properties would be attached.
The ED 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 initating recovery proceedings, Rana Kapoor allegedly conspired with the companies and got them to invest in firms run by his wife and daughters.
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According to the agency, firms owned by the family received in excess of Rs 4,000 crore in the past few years from companies that owed money to Yes Bank. As a classic case of this modus operandi, ED sources cited the purchase of a palatial bungalow owned by Avantha Group of companies at 40, Amrita Shergill Marg, address in Lutyens Delhi. The CBI has registered a case of corruption and criminal conspiracy against Rana Kapoor and his wife Bindu among others over this.
As per the CBI FIR, Yes Bank had loaned Rs 2,500 crore to Avantha Group. One of Avantha’s group companies, Avantha Realty, owned the Amrita Shergill property, then valued at Rs 550 crore, and had mortgaged it to ICICI Bank for a loan. It was to repay this loan that Avantha borrowed Rs 400 crore from Yes Bank in March 2016. Since the property was already mortgaged to ICICI Bank, the loan was sanctioned on the basis of a lease rental agreement that Avantha Realty entered into with BILT Graphics Paper Ltd (BGPPL), a group company of Ballarpur Industries Ltd.
The CBI says the lease putting the annual rent at Rs 65 crore was a sham, pointing out that the earlier tenant, Ballarpur Industries Ltd itself, paid only Rs 1.02 crore annually. The agency has alleged that BGPPL in fact never paid any rent to Avantha Realty.
The CBI has also raised questions regarding the terms of the Yes Bank loan, with the principal repayment for the 10-year loan fixed at Rs 5 lakh a month for the first year, though the incoming rent was supposedly above Rs 5 crore.
In due course, the loan became stressed and Yes Bank asked Avantha to sell the property to recover it. Consequently, in August, 2017, Bliss Abode Pvt Ltd (BAPL), a company owned by Rana Kapoor’s wife Bindu, made an offer to purchase the property, buying it eventually for Rs 378 crore. The bungalow is currently valued at over Rs 600 crore.
Interestingly, even before making the offer to Avantha, for which an NOC was given by the Yes Bank board headed by Rana Kapoor, BAPL received a loan from Indiabulls of Rs 90 crore against a property it didn’t still own. Indiabulls went on to finance the rest of the loan as well for the purchase of the property.
Says the CBI FIR, “The proposed increase of lease rent from Rs 1.02 crore per annum to Rs 65 crore per annum was… intentionally done to deceive Yes Bank to make the loan approval look justifiable without any reasonable basis. This appears to have been done with an intention to get the loan account become stressed for justifying sale of the charged property at 40, Amrita Shergill Marg, by Avantha Realty to Shri Rana Kapoor in the name of BAPL.”
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