Yes Bank suffered a loss of over Rs 2,700 crore due to the "unilateral decision" of its co-founder Rana Kapoor to invest in the Anil Ambani-led financial companies, said the CBI's charge sheet in a case pertaining to alleged fraudulent transactions between the bank and the industrialist's group entities.
The Central Bureau of Investigation (CBI) last month filed a charge sheet against 13 people and entities, including Anil Ambani, Rana Kapoor and his family members, alleging criminal conspiracy, cheating and corruption related to loans and investments.
The Federal probe agency's document said that further investigation was on regarding the role of Anil Ambani's son Anmol Ambani, the then executive director of Reliance Capital, in the case.
The case is based on two separate complaints lodged by the Chief Vigilance Officer of Yes Bank.
As per the charge sheet, the bank -- when Rana Kapoor was its managing director and chief executive officer -- made investments of Rs 5,010 crore in financial companies of the Anil Dhirubhai Ambani (ADA) Group between 2017 and 2019.
The investments included Rs 2,965 crore in non-convertible debentures (NCDs) of Reliance Home Finance Limited (RHFL) and 2,045 crore in commercial papers of Reliance Commercial Finance Limited (RCFL). Out of the total amount, Rs 3,337.5 crore turned Non Performing Investment (NPI) by December 2019, the charge sheet said.
The bank could not recover the entire NPI from the securities against these investments, and thus suffered a loss of Rs 2,796.77 crore, it said.
The charge sheet mentioned that some entities of ADA were found to be shell companies.
"The primary purpose of these shell companies was to receive funds from RHFL and RCFL, and subsequently route funds to other ADA Group companies to discharge their existing financial liabilities," it said.
The probe agency alleged that these transactions were an outcome of "quid-pro-quo" arrangement for loans granted by RHFL and RCFL to companies owned by Rana Kapoor's family members.
Rana Kapoor, working as a public servant along with his wife (Bindu Kapoor) and daughters (Radha and Roshini Kapoor) entered into a criminal conspiracy with Ambani, the then chairman of ADA Group, it alleged.
In pursuance of the criminal conspiracy, Rana Kapoor "unilaterally decided to subscribe to NCDs, knowing fully that there was no demand for these NCDs in the secondary market and holding them for a longer period would be detrimental to Yes Bank," the charge-sheet said.
The companies led by Bindu Kapoor availed of credit facilities amounting to Rs 570 crore from RHFL and RCFL at lower rate of interest under the instructions of Anil Ambani, the CBI alleged.
The charge sheet highlighted that as per the protocol, Rana Kapoor was bound to disclose the loan facilities availed by the companies owned by his family.
However, he "intentionally and dishonestly did not disclose" the same, it added.
Further, the CBI said Reliance Nippon Mutual Fund subscribed to NCDs worth Rs 1,160 crore of Morgan Credits Private Limited (owned by Kapoor's daughters) at a lower rate of interest.
It also invested an amount of Rs 2,250 crore in Yes Bank AT-1 Bonds (a type of hybrid capital instrument that banks issue to meet regulatory capital requirements) through private placement and secondary market under the influence of Anil Ambani, the CBI alleged.
The charge sheet claimed that SEBI's mutual fund regulations prohibited Anil Ambani from directly investing the funds of Reliance Nippon Mutual Fund in his other financial companies. He achieved it indirectly by subscribing to NCDs and investments in AT-1 bonds of Yes Bank.
The Rana Kapoor-led bank subscribed to NCDs of RHFL and RCFL and thus money was routed back to Ambani's company, it said.
The CBI said it was probing the role of Anil Ambani's son in subscribing to NCDs of Morgan Credits and Reliance Nippon Mutual Fund's investment in AT-1 bonds.
The Central Bureau of Investigation (CBI) last month filed a charge sheet against 13 people and entities, including Anil Ambani, Rana Kapoor and his family members, alleging criminal conspiracy, cheating and corruption related to loans and investments.
The Federal probe agency's document said that further investigation was on regarding the role of Anil Ambani's son Anmol Ambani, the then executive director of Reliance Capital, in the case.
The case is based on two separate complaints lodged by the Chief Vigilance Officer of Yes Bank.
As per the charge sheet, the bank -- when Rana Kapoor was its managing director and chief executive officer -- made investments of Rs 5,010 crore in financial companies of the Anil Dhirubhai Ambani (ADA) Group between 2017 and 2019.
The investments included Rs 2,965 crore in non-convertible debentures (NCDs) of Reliance Home Finance Limited (RHFL) and 2,045 crore in commercial papers of Reliance Commercial Finance Limited (RCFL). Out of the total amount, Rs 3,337.5 crore turned Non Performing Investment (NPI) by December 2019, the charge sheet said.
The bank could not recover the entire NPI from the securities against these investments, and thus suffered a loss of Rs 2,796.77 crore, it said.
The charge sheet mentioned that some entities of ADA were found to be shell companies.
"The primary purpose of these shell companies was to receive funds from RHFL and RCFL, and subsequently route funds to other ADA Group companies to discharge their existing financial liabilities," it said.
The probe agency alleged that these transactions were an outcome of "quid-pro-quo" arrangement for loans granted by RHFL and RCFL to companies owned by Rana Kapoor's family members.
Rana Kapoor, working as a public servant along with his wife (Bindu Kapoor) and daughters (Radha and Roshini Kapoor) entered into a criminal conspiracy with Ambani, the then chairman of ADA Group, it alleged.
In pursuance of the criminal conspiracy, Rana Kapoor "unilaterally decided to subscribe to NCDs, knowing fully that there was no demand for these NCDs in the secondary market and holding them for a longer period would be detrimental to Yes Bank," the charge-sheet said.
The companies led by Bindu Kapoor availed of credit facilities amounting to Rs 570 crore from RHFL and RCFL at lower rate of interest under the instructions of Anil Ambani, the CBI alleged.
The charge sheet highlighted that as per the protocol, Rana Kapoor was bound to disclose the loan facilities availed by the companies owned by his family.
However, he "intentionally and dishonestly did not disclose" the same, it added.
Further, the CBI said Reliance Nippon Mutual Fund subscribed to NCDs worth Rs 1,160 crore of Morgan Credits Private Limited (owned by Kapoor's daughters) at a lower rate of interest.
It also invested an amount of Rs 2,250 crore in Yes Bank AT-1 Bonds (a type of hybrid capital instrument that banks issue to meet regulatory capital requirements) through private placement and secondary market under the influence of Anil Ambani, the CBI alleged.
The charge sheet claimed that SEBI's mutual fund regulations prohibited Anil Ambani from directly investing the funds of Reliance Nippon Mutual Fund in his other financial companies. He achieved it indirectly by subscribing to NCDs and investments in AT-1 bonds of Yes Bank.
The Rana Kapoor-led bank subscribed to NCDs of RHFL and RCFL and thus money was routed back to Ambani's company, it said.
The CBI said it was probing the role of Anil Ambani's son in subscribing to NCDs of Morgan Credits and Reliance Nippon Mutual Fund's investment in AT-1 bonds.
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