Bank Fraud Case: Mumbai Court Grants Bail to Yes Bank Founder Rana Kapoor

A Mumbai Court has granted bail to Yes Bank founder Rana Kapoor in an alleged loan fraud case.

In March 2020, Kapoor was initially arrested in a money laundering case by the Enforcement Directorate. Eight cases have been registered against him by both the ED and the Central Bureau of Investigation (CBI), all linked to alleged frauds at Yes Bank.

While trials for these cases are pending, Kapoor has been held at Taloja jail in neighboring Navi Mumbai. He had previously obtained bail in seven cases.

The Judge

M G Deshpande, special judge for CBI cases, granted Kapoor bail, noting that trial proceedings for the present case were yet to commence and his incarceration was deemed unnecessary. However, the detailed order was not immediately available.

Allegations

According to the CBI, Kapoor, who was the managing director and chief executive officer of Yes Bank Limited (YBL), purportedly received “illegal gratification” (bribe) in the form of a property located at a prime location in Delhi, which was undervalued compared to its market price, in exchange for sanctioning a loan. The property, owned by Avantha Realty Ltd (ARL), had already been mortgaged for a loan acquired by the company from Yes Bank. Bliss Abode Private Limited, managed by Kapoor’s wife Bindu Kapoor, purchased the property in 2017 for Rs 378 crore, significantly lower than its market value of Rs 685 crore. Yes Bank, which had already extended credit facilities amounting to Rs 2500 crore to various Avantha Group companies, sanctioned an additional loan of Rs 400 crore to ARL as part of the alleged quid pro quo deal.

Kapoor, as the MD and CEO of YBL, chaired the Management Credit Committee (MCC) of the bank, which approved the loan. However, his bail application argued that the allegations in the CBI’s charge sheet did not establish his involvement in any wrongdoing. Kapoor’s lawyers, Aabad Ponda and Rahul Agarwal, contended that the chargesheet contained vague accusations against him. They emphasized that Kapoor was not the sole or final authority responsible for approving the loan transaction; rather, the entire MCC had collectively approved it.

The bail application also highlighted that co-accused, including Avantha Group promoter Gautam Thapar, had been granted bail, with Thapar being released without arrest. Considering these arguments, the court granted Kapoor bail. Following the completion of formalities, Kapoor was released from Taloja Central Prison around 7 pm, as confirmed by advocate Agarwal.

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