Yes bank-DHFL probe: Bombay HC directs ED to move CBI court to transfer case to PMLA court

The Bombay high court (HC) Friday directed the Enforcement Directorate (ED) to file an application before the special Central Bureau of Investigation (CBI) to transfer the CBI‘s case in the Yes bank-DHFL matter to the PMLA court.

Defence counsel Vijay Aggarwal appearing for arrested

promoter, Rana Kapoor before the Bombay High Court, sought directions to the ED to file for a transfer of cases in the same court as per the mandate of law under section 44 (1) (c) PMLA. Aggarwal argued that since 11 accused and seven witnesses are common in the CBI and ED case and that the offences alleged to have been committed by the applicant form part of the same alleged conspiracy, “…it can be safely inferred as such and be ordered to be transferred and tried by ED court”.

Aggarwal also contested that the defence of the accused is same and if these cases are not tried by the same court, then the defence of the accused shall be opened to opposite party and in the other case, the prosecution shall fulfill the cavity and cover up their case pursuant to the defence disclosed by the Accused in other cases.

The Bombay high court directed that the application which will be filed in the CBI court by the ED should be filed within three weeks and the the CBI court should decide the same, expeditiously.

Both Rana Kapoor and DHFL founders Kapil and Dheeraj Wadhawans have been arrested by the agency in the said case. The others charged under the provisions of Prevention of Money Laundering Act (PMLA) include Kapoor’s family members and three companies in their family group.

According to the agency’s prosecution complaint (PC) equivalent to a chargesheet, between 2018 August-September, DHFL had disbursed approximately Rs 450 crores towards its loan commitment for Radius Sumer’s Santacruz project. There was an old loan of Rs 750 crores of

on Radius-Sumer’s Santacruz project. And after disbursement of a Rs 450 crore loan by DHFL, Radius Sumer paid back the entire amount of Rs 450 crores to Yes Bank.

The probe revealed that the loan to BRPL, a DHFL linked company, was classified as a red flag account in November 2019 on the ground of non-commensurate progress in the project vis-a-vis the amount disbursed. However the loan was disbursed on the same day of sanction.

In his statement Ashish Chandak, group president and head ( Management Excellence & Governance) told ED that BRPL was a red flag account and review of the same would be carried out by vigilance.

The ED probe had allegedly found that DHFL promoters Kapil and Dheeraj Wadhawan had put up a proposal for the sanction of a loan of about Rs 1,700 crore from YBL in the name of BRPL for their Bandra Reclamation Project. Subsequently YBL bifurcated the loan into two parts as they were not sanctioned as one entity. Accordingly, Rs 750 crore was sanctioned in the name of BRPL and Rs 950 crore in the name of RKW project. “The loan of Rs 750 was disbursed by the bank. The whole amount was siphoned off the duo as the entire amount was transferred by M/s Belief Realtors Private Limited to M/s DHFL through maze of over 150 shell company M/s RKW Developers Private Limited without making investment in Bandra Reclamation Project for which the loan was sanctioned,” the chargesheet mentioned.

The loan of Rs. 600 crore sanctioned by DHFL to Doit Urban Ventures (India) Pvt ltd (DUVPL) is a subsidiary of M/s Morgan Credits Pvt. Ltd. (MCPL). Morgan Credits, in turn, are equally held by Kapoor’s three daughters.

Investigation has further revealed that Yes Bank had extended loans to entities despite them incurring losses and having negative net worth. Around the same period, these entities extended loans to companies beneficially owned by Kapoor’s family members having no substantial business. “This clearly indicates a case of quid pro quo… Kapoor has misused his official position to gain undue financial benefit from him and his family members,” it added.

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