Yes Bank founder Rana Kapoor's residence raided by ED in Mumbai
The Enforcement Directorate raided Yes Bank founder Rana Kapoor's residence on Friday, in connection with a money-laundering probe against him. The action comes just a day after the crisis-hit bank was placed under a moratorium with withdrawals capped at Rs 50,000. The raid was conducted at Rana's house at Samudra Mahal in Mumbai's Worli late Friday night with the agency also issuing a lookout notice against him. A case under the Prevention of Money Laundering Act (PMLA) has also been registered. The central agency is probing Kapoor's role in connection with the disbursal of a loan to a corporate entity and the subsequent alleged kickbacks that were reportedly received in his wife's accounts. Some other alleged irregularities are also under the agency's scanner.
Meanwhile, Yes Bank's new administrator Prashant Kumar said a solution is being worked upon to revive the bank well before the 30-day moratorium period ends. The financial position of Yes Bank underwent a steady decline largely due to the inability of the bank to raise capital to address potential loan losses and resultant downgrades, triggering panic among the investors.
Who is Rana Kapoor
Rana Kapoor joined Bank of America (BoA) as a management trainee in 1980. He worked at BoA for at least 16 years where he managed corporate, government and financial institution clients. It was in 1996 that Rana Kapoor joined ANZ Grindlays Investment Bank (ANZIB) as general manager and country head. In 2003, Kapoor along with his brother-in-law got a banking license by the RBI to set up Yes Bank.
Rana Kapoor earlier held 26 percent stake in Yes Bank while his brother-in-law had 11 percent of the stake, and Rabobank International held 20 percent stake. It was in 2005 when Kapoor was named Ernst and Young's Start-up Entrepreneur of the Year.
The draft scheme
The RBI had invited suggestions and comments from members of the public, including the banks' shareholders, depositors and creditors on the draft scheme. The draft scheme has also been sent to Yes Bank and SBI for their comments. RBI will receive suggestions up to March 9 and thereafter take a final call. As per the scheme, the authorised capital shall stand altered to Rs 5,000 crore and number of equity shares will stand altered to Rs 2,400 crore of Rs 2 each. The investor bank shall not reduce its holding below 26 per cent before completion of three years from the date of infusion of the capital into Yes Bank.
(With agency inputs)
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