ED questions Yes Bank co-founder Rana Kapoor in Reliance group money-laundering probe

The Enforcement Directorate on Monday questioned Rana Kapoor, co-founder of Yes Bank, in connection with a money-laundering investigation involving companies of the Reliance Anil Ambani Group, officials said.

Kapoor’s statement is being recorded under provisions of the Prevention of Money Laundering Act, as part of a probe into financial transactions linked to investments made by Yes Bank between 2017 and 2019.

According to the agency, Yes Bank invested Rs 2,965 crore in instruments issued by Reliance Home Finance Ltd and Rs 2,045 crore in Reliance Commercial Finance Limited during the period under scrutiny. By December 2019, both exposures had turned non-performing assets, the ED claimed.

The outstanding amounts stood at Rs 1,353.5 crore for Reliance Home Finance and Rs 1,984 crore for Reliance Commercial Finance.

The agency further alleged that the two companies received public funds totalling more than Rs 11,000 crore.

Investigators are also examining fund flows prior to the investments. The ED said that before Yes Bank extended funds to the Anil Ambani group firms, the bank had received large inflows from the erstwhile Reliance Nippon Mutual Fund.

Under regulations of the Securities and Exchange Board of India, the mutual fund was not permitted to directly invest in Anil Ambani group finance companies due to conflict-of-interest norms, the agency said.

The ED alleged that public money from mutual fund schemes was routed indirectly, with the trail passing through Yes Bank’s exposure to the group companies, potentially to circumvent regulatory restrictions.

Officials said the investigation is ongoing and further examination of financial transactions and individuals involved is underway.

With PTI inputs