The Enforcement Directorate (ED) on Friday conducted a search of YES Bank co-founder and former chief executive officer Rana Kapoor’s South Mumbai residence, Samudra Mahal, in connection with the bank's financial dealings with debt-laden Dewan Housing Finance (DHFL). This came hours after Finance Minister Nirmala Sitharaman listed “malpractices” by the bank’s top leadership among the reasons for the government’s intervention to restructure the management of the private lender.
Confirming the development, an ED official said searches would continue over the weekend and Kapoor might have to face questioning by sleuths.
According to the official, Friday's search was based on evidence reflecting a Rs 600-crore loan sanctioned by DHFL to Doit Urban Ventures, controlled by the family of Rana Kapoor.
“The transaction had taken place when the housing finance company failed to pay its dues to YES Bank," said the official. The lender's debt exposure was to the tune of Rs 3,700 crore in the DHFL debenture between April 2018 and June 2018, and also in July 2018. The ED is also probing the scheme of things behind YES Bank sanctioning a loan of Rs 750 crore to Dheeraj Wadhwan’s RKW Developers for a project near Mumbai’s Bandra Reclamation.
The agency came across this transaction during its probe into the DHFL promoters’ role in financing funds to gangster Iqbal Memon (alias Iqbal Mirchi). Sources said the agency might also register a separate case against Rana Kapoor. However, for a separate case, a police complaint has to be registered for predicate offence to probe the matter under the Prevention of Money Laundering Act (PMLA).