Published 18:29 IST, April 3rd 2020
PMLA court rejects bail plea of Yes Bank founder Rana Kapoor who cited COVID-19 threat
On Friday, the PMLA court in Mumbai rejected the bail application of Yes Bank founder Rana Kapoor, who had expressed a fear of contracting COVID-19 in jail.
Advertisement
On Friday, the Prevention of Money Laundering Act (PMLA) court in Mumbai rejected the bail application of Yes Bank founder Rana Kapoor. He was arrested by the Enforcement Directorate on March 8 after 30 hours of questioning in a money laundering case. Kapoor had moved the bail application citing a threat to his life in the wake of the novel coronavirus outbreak. The plea mentioned that the Yes Bank founder's existing medical conditions such as bronchial asthma, chronic immunodeficiency syndrome, severe hypertension, depression put him at a high risk of a lung infection if he contracted COVID-19 in jail. Moreover, it was argued that Kapoor needed to stay at home and get home-cooked food.
Accusations of money laundering
The ED has alleged that Kapoor misused his position as the Chief Executive Officer of Yes Bank to benefit his daughters' companies. According to the agency, loans worth Rs.30,000 crore were given by Yes Bank when he was at the helm of affairs. Out of these, advances of Rs. 20,000 crore became NPAs (non-performing assets).
According to the ED, Rana Kapoor's family members were associated with 78 companies that were allegedly used for the movement of money. On the other hand, Kapoor's counsel has highlighted his client's contribution to the bank, including the awards which he received. Furthermore, it was stressed that Kapoor's family members never defaulted on any of the loans granted.
The Yes Bank crisis
On March 5, the RBI imposed a moratorium on Yes Bank, superseding its Board of Directors and restricting the withdrawal limit for customers. The RBI cited Yes Bank's “inability to raise capital to address potential loan losses” and “serious governance issues” as some of the reasons for taking action. A day later, the RBI unveiled a draft reconstruction scheme of Yes Bank in the public domain.
On March 13, the Union Cabinet approved the reconstruction scheme of Yes Bank as proposed by RBI. The SBI has declared that it would purchase 725 crore shares of Yes Bank at Rs. 10 per share subject to regulatory approvals. As per reports, other lenders including ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank and individuals like Radhakrishna Damani, Rakesh Jhunjhunwala and Azim Premji Trust have joined SBI in investing in Yes Bank. Nearly two weeks after the imposition of the moratorium, the full banking services of Yes Bank became operational.
18:29 IST, April 3rd 2020