The Central Bureau of Investigation (CBI) during a preliminary enquiry into investments by Yes Bank in Anil Dhirubhai Ambani Group (ADAG) companies has found evidence for a case of corruption and misuse of office against the arrested cofounder of the lender Rana Kapoor.
The preliminary enquiry suggested FIRs could be filed against Kapoor, entities linked to him and certain ADAG firms, namely Reliance Commercial Finance Ltd (RCFL) and Reliance Home Finance Ltd (RHFL). But due to withdrawal of general consent by the Maharashtra government, which had earlier allowed the CBI to initiate probes in the state without seeking nod for each case, the agency has sought legal advice to pursue the case.
"Since the companies and the bank are registered in Mumbai, ideally the case should be probed by the Mumbai team. However, with the general consent being withdrawn, legal view is sought if the case can be pursued from a different jurisdiction," said an official.
RCFL is a subsidiary of Reliance Capital Limited, part of the ADAG. RHFL is also part of the group.
The preliminary enquiry (PE) was conducted after the bank submitted a complaint to the CBI alleging that Kapoor had misused his official position by extending financial assistance to ADAG firms. "The probe has found that Kapoor approved investments in ADAG firms without having a detailed risk assessment in place, waiving requirements to have CAMs (credit analysis memorandum) and approving the same on email, which was in violation of the credit policy of bank," the PE report said.
The PE report claims that Kapoor, being the MD and the CEO of the bank, was involved in granting credit facilities/investments to ADAG companies which had in turn granted loans to entities held by his family members. As per the bank's code of conduct, Kapoor was obligated first to avoid such a conflict and take prior permission from the BoD or committee of independent directors of the board. "Such multiple non-disclosures and non-recusal cast doubt on the intention of Kapoor," the report said.
Emails sent to ADAG and Yes Bank remained unanswered. Kapoor's counsel wasn't immediately available for a comment. Sources said all these matters related to RCFL and RHFL are sub judice before the Delhi High Court.
"Investigating agencies, as part of their investigation against Rana Kapoor, are looking into business transactions of the Yes Bank with various companies and business groups," a source aware of the developments in the company said.
In one such case, the CBI found that the 'loan approval email' was initiated at 00.49 hours. "..and first MCC member approved it in six minutes and another IC (investment committee) member in another six minutes," the report said.
The email exchanges showed that Kapoor had approved the investments on 'text'. "...the reasons for hurry with which the investments were approved by email, with teams working overnight and approvals being given at 1.06 am is not clear," the report added.
Kapoor was the head of the investment committee and the management credit committee (MCC) at Yes Bank when he approved ₹1,400 crore in non-convertible debentures (NCDs) and commercial papers in RCFL. Also, the bank invested ₹2,965 crore ..
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