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YES Bank Collapse: Rana Kapoor faces money laundering charges, ED raids residence

BusinessToday.In     March 6, 2020

Enforcement Directorate has raided residence of YES Bank founder Rana Kapoor on Friday night in connection to a money laundering case. The agency has also issued a lookout notice against the veteran banker to keep him from leaving the country.

Reports suggest that Enforcement Directorate (ED) sleuths are present at Kapoor's home in Samudra Mahal at Mumbai. ED officials are reportedly recording Kapoor's statement in connection with DHFL scam, where the company siphoned off Rs 13,000 crore via 79 shell companies. YES Bank had extended massive loans to DHFL, which later turned bad, adding to the banks losses, reports said.

Action against Kapoor came shortly after the Reserve Bank of India (RBI) presented a reconstruction scheme for YES Bank. The private sector lender has been placed under moratorium by the government on recommendations from the Reserve Bank of India (RBI) till April 3. The government has limited withdrawals to Rs 50,000 for a month, superseded YES Bank board and appointed Prashant Kumar, former Deputy Managing Director and CFO of State Bank of India (SBI), as administrator in its place. The action came due to deteriorating financial position, governance issues, false fundraising assurances, non-serious investors and outflow of liquidity.

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Earlier on Friday, Finance Minister Nirmala Sitharaman said during a media interaction that she has asked RBI to identify the individuals responsible for troubles at YES Bank. "I have asked the RBI to go into assessing what caused these difficulties for YES Bank. And also, clearly identify the role played by various individuals in creating the problems and not so comprehensively addressing the problem," she said.

Without naming Kapoor, Sitharaman said, "Since 2004, when YES Bank was founded, it has been under the same management. After RBI's scrutiny and identifying the culture of weak compliance, poor governance, and very risky credit-issuing habits, in September 2018 they clearly said that the leader has to change. They did not allow further continuation of chief executive's term after September 2018. A new CEO was appointed in September 2018, as a result."

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