Supreme Court rejects Yes Bank founder Rana Kapoor's bail request
Kapoor withdrew his bail plea after the top court refused to entertain his request
- Aug 4, 2023,
- Updated Aug 4, 2023 12:39 PM IST
The Supreme Court (SC) on Friday denied bail to Yes Bank's founder Rana Kapoor in connection with a money laundering case lodged.
Kapoor has been accused of receiving 'kickbacks' or illegal gratification for sanctioning bad loans.
Pronouncing the order, the court said the case has "rocked the entire banking system". "This case rocked the Indian banking system. Yes Bank went into difficulty and the Reserve Bank of India (RBI) had to step in to protect investors," Justice Sanjiv Khanna said on Friday.
The court also questioned why the investigation by the Enforcement Directorate (ED), probing the Rs 3,642-crore Yes Bank scam, is taking this long.
Replying to this, the Additional Solicitor General said, "There are hundreds of shell companies. The investigation is taking a long time because we are trying to get information from foreign countries."
In 2018, Yes Bank allegedly invested Rs 3,700 crore in short-term debentures of DHFL. It also sanctioned a loan of Rs 750 crore to a subsidiary of DHFL.
Kapoor allegedly received kickbacks of Rs 600 crore by extending a loan to DOIT Urban Ventures (India) Pvt Ltd, which is wholly owned by RAB Enterprises, a company owned by Kapoor's wife and daughters.
Senior advocate Abhishek Manu Singhvi, who was appearing for Kapoor, told the top court, "The bank was put in difficulty but that's no reason to keep a man behind bars indefinitely. He's been behind bars since 8 March 2020. He has been incarcerated for over 3 years and has undergone more than the minimum sentence possible."
To this, the Supreme Court said: "Once they get bail, the trial will never end."
In July, Sebi sent a notice to Rana Kapoor asking him to pay Rs 2.22 crore in the case of mis-selling the private sector lender's AT1 (Additional Tier-1) bonds and warned of arrest and attachment of assets as well as bank accounts if he failed to make the payment within 15 days. The sale of AT1 bonds started in 2016 and continued till 2019.
The ED had registered an ECIR (Enforcement Case Information Report) on March 7, 2020, against Rana Kapoor, who was the CEO of Yes Bank, and others.
In April this year, Kapoor was granted bail by a special Prevention of Money Laundering Act (PMLA) court in a money laundering case. The case was pertaining to irregularities worth Rs 900 crore in a loan given to Housing Development and Infrastructure Limited (HDIL).
In January 2021, the ED arrested Kapoor in the Mack Star Group-PMC Bank scam case. HDIL promoters Sarang and Rakesh Wadhawan are the prime accused in the PMC bank scam case. HDIL was a stake in Mack Star Group and had borrowed a loan from Yes Bank without the knowledge of the other stakeholder in Mack Star.
In November 2022, Kapoor got bail in another Rs 466.51 crore case involving Dewan Housing Finance Limited (DHFL). In this case, the central agency alleged that the former Yes Bank CEO and DHFL promoters Kapil and Dheeraj Wadhawan siphoned off funds worth Rs 5,050 crore through suspicious transactions.
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The Supreme Court (SC) on Friday denied bail to Yes Bank's founder Rana Kapoor in connection with a money laundering case lodged.
Kapoor has been accused of receiving 'kickbacks' or illegal gratification for sanctioning bad loans.
Pronouncing the order, the court said the case has "rocked the entire banking system". "This case rocked the Indian banking system. Yes Bank went into difficulty and the Reserve Bank of India (RBI) had to step in to protect investors," Justice Sanjiv Khanna said on Friday.
The court also questioned why the investigation by the Enforcement Directorate (ED), probing the Rs 3,642-crore Yes Bank scam, is taking this long.
Replying to this, the Additional Solicitor General said, "There are hundreds of shell companies. The investigation is taking a long time because we are trying to get information from foreign countries."
In 2018, Yes Bank allegedly invested Rs 3,700 crore in short-term debentures of DHFL. It also sanctioned a loan of Rs 750 crore to a subsidiary of DHFL.
Kapoor allegedly received kickbacks of Rs 600 crore by extending a loan to DOIT Urban Ventures (India) Pvt Ltd, which is wholly owned by RAB Enterprises, a company owned by Kapoor's wife and daughters.
Senior advocate Abhishek Manu Singhvi, who was appearing for Kapoor, told the top court, "The bank was put in difficulty but that's no reason to keep a man behind bars indefinitely. He's been behind bars since 8 March 2020. He has been incarcerated for over 3 years and has undergone more than the minimum sentence possible."
To this, the Supreme Court said: "Once they get bail, the trial will never end."
In July, Sebi sent a notice to Rana Kapoor asking him to pay Rs 2.22 crore in the case of mis-selling the private sector lender's AT1 (Additional Tier-1) bonds and warned of arrest and attachment of assets as well as bank accounts if he failed to make the payment within 15 days. The sale of AT1 bonds started in 2016 and continued till 2019.
The ED had registered an ECIR (Enforcement Case Information Report) on March 7, 2020, against Rana Kapoor, who was the CEO of Yes Bank, and others.
In April this year, Kapoor was granted bail by a special Prevention of Money Laundering Act (PMLA) court in a money laundering case. The case was pertaining to irregularities worth Rs 900 crore in a loan given to Housing Development and Infrastructure Limited (HDIL).
In January 2021, the ED arrested Kapoor in the Mack Star Group-PMC Bank scam case. HDIL promoters Sarang and Rakesh Wadhawan are the prime accused in the PMC bank scam case. HDIL was a stake in Mack Star Group and had borrowed a loan from Yes Bank without the knowledge of the other stakeholder in Mack Star.
In November 2022, Kapoor got bail in another Rs 466.51 crore case involving Dewan Housing Finance Limited (DHFL). In this case, the central agency alleged that the former Yes Bank CEO and DHFL promoters Kapil and Dheeraj Wadhawan siphoned off funds worth Rs 5,050 crore through suspicious transactions.
Also read: Zomato stock up over 10% after reporting PAT at Rs 2 Cr, but is the company truly profitable?
Also read: Virat Kohli’s special chartered flight from West Indies draws flak from netizens