As part of its money-laundering investigation against arrested YES Bank co-founder Rana Kapoor, the Enforcement Directorate (ED) was now looking into several multi-crore-rupee loans issued by YES Bank to corporate houses that turned non-performing assets (NPAs), officials said.
The ED has widened its probe in the case, taking it beyond the loan it gave to Dewan Housing and Finance Limited (DHFL) and is now looking at the bank's books to see if the Kapoor family and others received any kickbacks from business houses in lieu of non-initiation of the loan recovery processes.
The central agency is probing the Rs 600-crore loan scam-hit DHFL gave to a firm "controlled" by Rana Kapoor's family -- his wife and three daughters -- allegedly for not recovering from it over Rs 4,000 crore of loans issued by YES Bank.
YES Bank CEO Ravneet Gill was questioned by the Enforcement Directorate (ED) at its office in Mumbai on Monday, news agency PTI reported on Monday quoting sources.
The sources added that the investigators had also zeroed in on Kapoor's purported foreign assets in the UK, France and the US to see if the proceeds of money laundering had been used to purchase these assets by the banker and his family.
A dozen alleged shell firms, the Kapoor family's investments of Rs 2,000 crore, and over Rs 4,500 crore worth of other transactions are under the scanner of the agency at present.
The agency has also found that 44 costly paintings, one of them purchased from Congress leader Priyanka Gandhi Vadra, are allegedly in the possession of Kapoor. The ED has seized that painting and brought to its office.
A letter written by Priyanka Gandhi to Kapoor in June 2010 confirmed the sale of this portrait of her father and former prime minister Rajiv Gandhi, painted by M F Husain, for Rs 2 crore. In the letter, Priyanka Gandhi thanked Kapoor for purchasing the portrait "which was presented to him in 1985 at the Congress party centenary celebrations and is presently in my ownership and possession".
While the Congress party has said that the deal was transparent, as the payment of Rs 2 crore was received by Vadra from Kapoor through cheque and was reflected in income tax returns, the ED is probing if the painting was owned by her or the All India Congress Committee (AICC).
It is also investigating if the provenance certificate (signed by an artist to state his genuine work) was signed by Vadra and under what circumstances. Apparently, this Rs 2 crore was used by Vadra to purchase a property in Himachal Pradesh.
The portrait had been made by celebrated artist Husain and gifted to Gandhi during the AICC centenary celebrations in 1985.
Kapoor and his wife are also expected to be confronted by the ED with Kapil Wadhawan, DHFL promoter and CMD. He was arrested by the ED in the Iqbal Mirchi PMLA case and is out on bail at present.
A big housing finance company and a financial insurance firm are also under the scanner of the ED for their dealings with Kapoor and YES Bank.
A particular instance of a popular power generation company taking Rs 500 crore loan from the bank and it later turning NPA is also being probed by the ED.
The Income Tax Department is also set to initiate action against Kapoor and others for tax evasion and possession of alleged undeclared foreign assets.
Meanwhile, the Odisha unit of the Bharatiya janata Party (BJP) on Monday alleged a conspiracy behind the deposits of Rs 545 crore of the Shree Jagannath Temple in capital-starved bank and demanded a probe into it by the ED. Senior BJP leader Bijay Mohapatra also claimed the involvement of some members of the Jagannath Temple Managing Committee and two government officials in depositing the funds in the private bank.
The ruling Biju Janata Dal (BJD), however, rubbished the allegations and said the saffron party was misleading the people. The Odisha government had on Sunday sought the Centre's intervention for release of the funds in the interest of devotees.
BJP state general secretary Prithviraj Harichandan had on Sunday held the state government responsible for pushing the temple's funds into uncertainty. Reacting to the charges, BJD spokesperson and the party's Rajya Sabha nominee Subhas Singh said: "The BJP leaders are trying to mislead people over the matter. It is an old habit of Mohapatra to politicise issues related to the Lord Jagannath Temple.
Earlier, Congress Legislature Party leader Narasingha Mishra had demanded a statement from Chief Minister Naveen Patnaik over the matter. Odisha Chief Minister Patnaik has been silent on the issue.
In another development, bondholders with exposure to YES Bank's Additional Tier-1 (AT-1) securities have approached the Bombay High Court against a decision to write down their investments in the struggling bank as part of a draft rescue plan, news agency IANS reported.
Under the draft resolution plan for YES Bank given by the Reserve Bank of India (RBI) after superseding its board, the banking regulator capped deposit withdrawals at Rs 50,000 per person and appointed an administrator. It also proposed to write off Rs 8,400 crore worth of AT1 bonds on the lender's balancesheet while retaining equity.
Axis and Nippon India Mutual Fund Trustees may have moved the court to seek relief. It is, however, yet to be confirmed by the fund houses. According to an Icra report, 16 Indian banks have Rs 93,669 crore worth of AT1 bonds outstanding. But the development in case of YES Bank has triggered a debate about the seniority of the AT1 bondholders over equity investors.
But RBI is within its powers to write down AT1 bonds under Basel-III norms.