PMLA Court orders Yes Bank founder Rana Kapoor incarcerated to ED

PMLA Court orders Yes Bank founder Rana Kapoor incarcerated to ED

Kapoor was arrested for allegedly granting a loan of over Rs 200 crore to Mack Star Marketing Private Limited when he was the Yes Bank chairman

The Enforcement Directorate (ED) has arrested Yes Bank founder Rana Kapoor in the Mack Star Group-PMC Bank Scam on 27 January 2021. He is the third person who has been under arrest in the case.

Kapoor was arrested for allegedly granting a loan of over Rs 200 crore to Mack Star Marketing Private Limited, a company owned by Housing Development and Infrastructure Ltd (HDIL) promoters Rakesh and Sarang Wadhawan, when Kapoor was the chairman of Yes Bank.

HDIL promoters Sarang and Rakesh Wadhawan are the prime accused in the PMC bank scam case. HDIL had a stake in Mack Star Group and had borrowed a loan from Yes Bank without knowledge of the other stakeholder in Mack Star.

In a statement, published last week by ED, it stated that it was reportedly probing instance involving the searched firm where the Wadhawans allegedly siphoned off Rs 200 crore loan sanctioned by Yes Bank to a Mack Star Marketing Pvt Ltd.

The loan was borrowed in name of the refurbishment of a newly constructed building of Mack Star Group. The loan itself was suspicious in nature as it was borrowed for the purpose of repairs and refurbishment of the building.

It was alleged that Wadhawans of HDIL separated two commercial properties in the said building worth Rs 34 crore to Viva Group controlled by the Thakur family. It was revealed that they sold the property and sale agreement was prepared and registered on 26 June 2017, where purchase amount was shown to be paid through 37 cheques which were issued by Viva Holdings a Viva Group company to Mack Star Marketing against the property.

ED found that those cheques were never actually encashed. These two properties also were not found in the balance sheet of Viva Holdings. During the investigation, ED also suspected that loans borrowed from PMC Bank worth hundreds of crores were also transferred by Wadhawans to Viva Group.

Advocate Hiten Venegaokar submitted to the Court that HDIL mortgaged the properties to Yes Bank against which they took Rs 203 crore and this money was taken for refurbishing or repairing newly constructed properties.

Appearing on behalf of Kapoor, Advocate Abad Ponda submitted that Yes Bank had only received money as a repayment of a loan by the lender HDIL. He further submitted to the Court that ED possibly could have interrogated him while he was in judicial custody and an application to that effect could have been made even presently. In addition, he pointed out since Kapoor was in judicial custody, he would not possess the requisite documents and electronic device accessibility with him which the agency may require from him and he would not have any access to it.

The special court dealing with Prevention of Money Laundering Act (PMLA) cases on 27 January 2021 incarcerated Yes Bank founder Rana Kapoor to ED custody till 30 January 2021.