Winning Bizness Desk
Mumbai.The Enforcement Directorate on Monday questioned Yes Bank cofounder and former CEO Rana Kapoor in connection with a money laundering probe linked to companies of the Anil Ambani Group. Kapoor, who headed Yes Bank from 2003 to 2019, recorded his statement under the Prevention of Money Laundering Act. The case centres on allegations that large volumes of public money were routed through Yes Bank to Anil Ambani-owned companies and later misused, causing significant losses to investors.
Public funds allegedly routed via Yes Bank
According to the ED, more than Rs 11,000 crore of public funds were diverted to Anil Ambani Group companies through Yes Bank. PTI reported that the agency believes the bank acted as a conduit to move money originating from mutual fund investments into group firms that were otherwise restricted under market regulations. Investigators say this routing of funds violated regulatory norms and eventually led to massive non-performing assets.
How the alleged investment structure worked
The ED claims that Yes Bank invested heavily in two Anil Ambani Group firms using money sourced from Reliance Nippon Mutual Fund, which represented public investors’ funds. Direct investment by the mutual fund into the group was not permitted under SEBI rules, prompting the alleged indirect route.
Key investments under scrutiny include:
- Rs 2,965 crore invested in Reliance Home Finance Limited
- Rs 2,045 crore invested in Reliance Commercial Finance Corporation
- Funds moved from mutual fund to Yes Bank, then to group companies
- By December 2019, these investments turned into NPAs
The agency suspects that the structure was designed to bypass regulatory restrictions and conceal the true flow of funds.
Money laundering probe and Kapoor’s questioning
ED officials say the case qualifies as money laundering because public money was allegedly diverted through layered transactions. Rana Kapoor’s questioning forms part of efforts to establish links between senior Yes Bank officials and Anil Ambani Group entities. The agency is examining whether there was a deliberate violation of SEBI norms and whether bank decisions were influenced to facilitate the flow of funds.
The probe is also focusing on internal approvals, documentation and communications between the bank and group companies. Based on Kapoor’s statement, the ED may summon other individuals or seek additional records linked to the transactions.
Searches, attachments and earlier actions
The case has seen multiple enforcement actions over the past year. On July 24, the ED conducted searches at locations linked to the Reliance Group. This was followed by raids by the CBI at Anil Ambani’s residence on August 23. The ED has already attached several high-value properties linked to the group as part of the investigation.
Assets attached so far include:
- 132 acres of land in Navi Mumbai
- A residential property at Pali Hill
- More than 40 properties across locations
- Total provisional attachment of assets worth Rs 1,120 crore
Wider impact and what lies ahead
In total, the ED says it has attached assets worth Rs 10,117 crore linked to Anil Ambani Group companies, including bank balances, fixed deposits, unlisted investments and properties at Mumbai’s Ballard Estate. Properties of Reliance Infrastructure, Reliance Power and Reliance Value Services have also been frozen, along with investments held by group-linked asset management firms.
Earlier, in bank loan fraud cases, assets worth over Rs 8,997 crore linked to Reliance Communications, Reliance Commercial Finance and Reliance Home Finance were attached. The ED says the probe is now moving faster, and if sufficient evidence emerges, a chargesheet could follow, potentially impacting both Yes Bank and the Anil Ambani Group further.
