The directorate of enforcement (ED) has conducted searches at 17 locations across Mumbai and Delhi as part of a money laundering investigation linked to the alleged diversion of loans obtained by Housing Development & Infrastructure Ltd (HDIL) and its associated entities.
The searches were carried out under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, and covered premises connected with Suraksha Asset Reconstruction Company Ltd (Suraksha ARC), Suraksha Realty Ltd, Khyati Realtors Pvt Ltd and several other individuals and entities linked to the case, the agency said.
According to the ED, the investigation originates from a Central Bureau of Investigation (CBI) case against HDIL and others for allegedly obtaining loans worth about ₹200 crore through fraudulent means and subsequently diverting the funds.
Alleged Conspiracy Involving HDIL and Yes Bank
The ED stated that its investigation has revealed an alleged conspiracy involving HDIL promoters Rakesh Kumar Wadhawan, Sarang Wadhawan, and Rana Kapoor, former managing director and chief executive officer (MD&CEO) of Yes Bank.
According to the agency, six term loans aggregating approximately ₹200.30 crore were sanctioned between 2011 and 2016 in the name of Mack Star Marketing Pvt Ltd (MSMPL).
The agency alleges that the loan proceeds were diverted towards repayment of liabilities of HDIL group entities instead of being utilised for the purposes for which the loans had originally been sanctioned.
The ED further alleged that several properties owned by MSMPL were subsequently transferred to associates of the accused persons.
Questions Over Assignment of Loan Account
According to the agency, Rana Kapoor allegedly facilitated the diversion of funds from the MSMPL loan accounts towards HDIL liabilities and enabled the premature assignment of the loan account to Suraksha ARC as part of an effort to allegedly evergreen stressed debt.
The ED stated that during FY17-18, Suraksha ARC acquired a substantial portfolio of stressed assets assigned by Yes Bank, including the MSMPL loan account.
At the same time, Yes Bank allegedly extended credit facilities to multiple entities belonging to the Valia group. Investigators suspect that these funds may have been used, directly or indirectly, to meet cash margin requirements associated with the acquisition of stressed loan accounts by Suraksha ARC.
The agency said it is examining the financial arrangements surrounding these transactions and has identified other alleged irregularities during the course of the investigation.
Cash, Silver and Documents Seized
During the search operations, ED officials seized cash amounting to ₹50 lakh, 10kg of silver bars, bank locker details and several incriminating documents and digital devices.
According to the agency, evidence collected so far points to a series of circular transactions among group entities.
The ED alleges that certain transactions involving Yes Bank loans were structured and presented as cash margin payments by the asset reconstruction company. Such arrangements, it claims, may have enabled a liquidity-neutral and interest-neutral acquisition of stressed assets.
Investigators are examining whether the structure of these transactions was used to facilitate the acquisition and settlement of distressed loan accounts.
Investigation Continues
The searches form part of ED's ongoing probe into the alleged diversion of loan funds and the subsequent handling and acquisition of stressed assets linked to the HDIL group.
The agency said further investigation is underway to trace the flow of funds, determine the role played by the entities involved and examine the financial arrangements connected with the acquisition of the loan accounts.
As of now, ED has not disclosed whether any arrests have been made in connection with the latest searches.
The allegations remain under investigation, and the liability or innocence of the individuals and entities named will be determined through the due process of law.
