Rana Kapoor, the founder and Managing Director of Yes Bank has been sent to Enforcement Directorate custody a couple of days after the RBI laid a moratorium on Yes Bank, founded in 2004 by Rana.
He was arrested earlier by the CBI on money laundering charge and a separate case of corruptions was also filed against him by the CBI.
Prior to be being sent to ED custody, Rana broke down in the Mumbai court after hours of interrogation and searches at his and his daughters' residences.
Sunil Gonsalves, lawyer of ED told the court that Rana had refused to cooperate and the alleged crime against him amounts to a whoopping Rs 4,300 crore. Rana, meanwhile denied this and broke down in court, saying that he was willing to cooperate all the time, inspite of not getting much sleep in the last few days.
Rana's lawyer, Zain Shroff said that his client was made a scapegoat subseuqent to the public outrage against Yes Bank, following RBI's moratorium and imposing a Rs 50,000 withdrawls limit.
RBI had taken the call last week to lay down a moratorium and take over the board of YES Bank, following the increasing bad debts of the Bank and its inability to raise funds to stay above regulatory requirements.
The YES Bank fiasco is the third in line after Dewan Housing Finance Limited (DHFL) and PMC Bank. Interestingly, Yes Bank held Rs 3,700 Crore worth of debentures of DHFL, while a company called Doit was granted a loan of Rs 600 Crore by DHFL.
Doit is owned by Rana's three daughters and this was being seen as a kickback given by DHFL for the bonds taken up by Yes Bank. ED alleged that the kickback was in place, since Yes Bank did not initiate proceedings against DHFL after it was declared bankrupt and control was taken over by RBI.
As claimed by Rana's lawyer, the loan to Doit by DHFL was against a collateral valued at Rs 700 Crore, however, ED enforcers valued the collateral at Rs 40 Crore.
Rana has investments over Rs 2000 Crore, paintings worth crores of rupees and a dozen alleged shell firms.
The arrest of the founder and former CEO and MD of Yes Bank comes after charges of alleged financial irregularities and mismanagement in its operations surfaced and the RBI and Union Government initiated action to control is affairs.