Rana Kapoor's hotels, bungalows, flats and paintings — everything that Yes Bank founder is suspected for buying with kickbacks

• The Enforcement Directorate is currently investigating Yes Bank founder Rana Kapoor.
• They suspect that he's responsible for ₹30,000 crore worth loans at Yes Bank that went bad.
• Here's the full story of everything that the ED's investigation has revealed so far about how Rana Kapoor gave out those loans and pocketed the kickbacks.

Yes Bank founder Rana Kapoor shunned the family jewellery businesses to break into the tough world of private banking in India. However, his choice of loans, heady risks and illegal practices of lending against kickbacks brought the country’s fourth-largest lender under the lens of investigative agencies.

A year after he entered the billionaire club, Kapoor’s world started to crumble when the Reserve Bank of India (RBI) asked Kapoor to step down from his position as CEO of Yes Bank by January 2019. By July, Yes Bank’s share price had dropped by 78% leaving Kapoor with a net worth of $377 million.

But the bank had lost much more as ₹30,000 crore worth loans went bad, and the Enforcement Directorate (ED) held him responsible. After the ED arrested him, it has identified 78 shell corporations that are suspected of receiving kickbacks in exchange for loans that no other bank would touch.

According to the investigation, as his depositors lost money, he became richer by ₹5,000 crore only in kickbacks. With funds routed through shell companies and benami accounts, Kapoor bought hotels in New York and London, bungalows in Delhi, flats in Mumbai and expensive paintings.

The ED's investigation also revealed that, Kapoor who played fast and hard with rules, also failed to insulate his family from harm. His wife Bindu and three daughters — Roshini, Radha and Rakhee — are at the helm of most of these shell companies, and CBI has its claws around them too.

The case of money laundering
The saga of crony capitalism started to come to light last week when Kapoor was booked under the Prevention of Money Laundering Act (PMLA) on March 6 to look into the connection between him and Yes Bank’s bad loans.

The ED raided his residence at Samudra Mahal in Worli to search for evidence and grilled him for hours. The following day, officials took Kapoor back to ED’s Ballard Pier office in Mumbai.

During the course of the interrogation, the agency expanded its probe to include his daughters. They allegedly own multiple companies that received kickbacks from different corporates who received loans from Yes Bank.

The ₹600 crore kickback from DHFL
One of the companies suspected by the ED of giving kickbacks to Kapoor’s companies is DHFL — accused of misappropriating funds worth ₹25,000 crore, which ultimately led to its downfall.

Yes Bank had doled out a loan of ₹3,750 crore directly to DHFL and another loan worth ₹750 crore to RKW Developers, a subsidiary of DHFL. However, when the real estate company defaulted on its loan, Kapoor did not initiate any action.

The ED now suspects that his restraint was a result of kickbacks to the tune of ₹600 crore to Doit Urban Ventures — a dummy corporation owned by Kapoor and two of his daughters.

Nearly 80 shell companies set up to receive bribes and buy bungalows
Two days into the interrogation Kapoor was arrested for not cooperating with the authorities. Meanwhile, 10 teams of the CBI were involved in its search operations spread across the south Mumbai neighbourhood.

The ED found that Rana Kapoor and his family had more than 78 shell companies set up to receive bribes and invest in properties under the radar. All of these companies were either directly under Kapoor’s control or under the control of his wife and daughters. His wife, Bindu, was the director of at least 42 companies.

The companies allegedly invested in properties with a net worth of over ₹2,000 crore. An official told PTI that the current market value of those properties could be well above ₹5,000 crore.

His shady overseas properties include two luxury hotels — one in New York worth over $20 million and one in London worth nearly £30 million — two residential apartments in London valued at £15 million apiece, and a yacht.

In India, Kapoor owns six bungalows in Delhi’s upscale neighbourhoods, including Jor Bagh, Hauz Khas and Kautilya Marg. Two were bought by a company called Bliss Adobe, which had Bindu as its director.

The property on Amrita Shergil Marg was auctioned off by Avantha Realty when Bliss Abode picked it off the market. Coincidentally, Yes Bank’s exposure to Avantha Realty was ₹500 crore.

The other house on Sardar Patel Marg was bought by the Kapoor’s shell corporation Bliss Home. ED’s investigation noted that the house was formerly owned by Vijay Mallya.

ED also found that Kapoor owns six flats and a parcel of land in Mumbai and its suburbs.

Priyanka Gandhi Vadhra and the painting by MF Hussain
During the search of his Mumbai residence, the ED seized nearly 50 pieces of art from his home. One of the paintings — a portrait of former prime minister Rajiv Gandhi by MF Hussain — belonged to Congress leader Priyanka Gandhi Vadra.

The Congress party says that the deal between Vadra and Kapoor was a transparent transaction of ₹2 crore. The payment was made through cheque and was reflected in income tax returns.

However, the ED is still looking into whether the painting was Vadra’s to sell or belonged to the All India Congress Committee (AICC). It’s also looking into whether the provenance certificate — which authenticates the artwork — was signed by Vadra and under what circumstances.

Can’t leave the country
Kapoor and his family currently can’t leave the country. A look-out notice was also issued in their names on March 12 along with DHFL promoter Kapil Wadhawan and Dheeraj Wadhawan.

Roshini, Kapoor’s youngest daughter, was stopped at the CSM International Airport in Mumbai trying to catch a flight to London.

Kapoor’s arrest has been extended to March 16 during which he will be in the custody of the ED. The Central Bureau of Investigation (CBI) is also loading its guns. It has begun a probe into the Yes Bank affairs but has not elaborated on the nature of the probe.

The Income Tax Department is next in line to initiate action against Kapoor and others for tax evasion and possession of alleged undeclared foreign assets. Meanwhile, the Odisha unit of the Bharatiya Janata Party (BJP) has asked for a separate probe to look into the alleged conspiracy behind the deposits of ₹545 crore of the Shree Jagannath Temple.

Money laundering, tax evasion, fraud and insider trading— the founder of India’s fourth-largest private sector bank Rana Kapoor has been accused of it all. And, the evidence against him is piling up.

While depositors are all set to get relief this week as moratorium lifts, Kapoor who claims he has “no clue” why RBI restricted withdrawals - will stay with the authorities trying to explain how he sunk crores into companies that can best be described as money pits.

See also:
Yes Bank crisis and its domino effect on bonds, mutual funds and other corporate defaults

The fall of Yes Bank founder Rana Kapoor from a billion dollars to facing a ₹4300 crore investigation

The three Kapoor sisters who said ‘no’ to banking are now in the dock with Yes Bank crisis