CBI files chargesheet against Rana Kapoor — The rise and fall of Yes Bank’s former co-founder and CEO

Sep 20, 2022

By: Vaamanaa Sethi

Who is Rana Kapoor?

Delhi-based Rana Kapoor is the co-founder and former managing director and chief executive of Yes Bank. He co-founded the bank in 2003.

Credit: BCCL

Career background

In 1980, he started his career as a management trainee at Bank of America, where he worked for almost 16 years. Later, he joined ANZ Grindlays Investment Bank as general manager & country head in 1996 and spent two years there.

Credit: BCCL

Funding for Yes Bank

Kapoor, his brother-in-law Ashok Kapur and Harkirat Singh formed an NBFC in 1998. The three had 25 percent equity, while Rabobank had the rest. They sold their equity in the venture in 2003 and set up a private sector bank –Yes Bank.

Credit: BCCL

Yes Bank shares rise

According to reports, rising share prices and increased net profit of Yes Bank quickly made Kapoor a billionaire. In 2017, the bank’s net profit registered a 32 percent year-on-year growth.

Credit: BCCL

Kapoor steps down as CEO

In September 2018, Yes Bank ordered Kapoor to step down as CEO as the company was facing a hard time in getting financing from existing lenders. In January 2019, Kapoor was replaced by Ravneet Gill as CEO.

Credit: BCCL

Share prices drop

The leadership change led to a massive drop of at least 78 percent in Yes Bank shares, according to a Times of India report. His wealth also declined sharply from about a billion dollars to $377 million.

Credit: BCCL

Kapoor gets into trouble

In March 2020, the Enforcement Directorate (ED) registered a case against Kapoor under the Prevention of Money Laundering Act (PMLA) and he was arrested. The ED claimed that Kapoor's crime amounted to around $581 million. Kapoor denied all charges.

Credit: BCCL

Loan fraud

The ED said that his family members got benefits worth ₹43 billion through companies controlled by his family for sanctioning huge loans through Yes Bank.

Credit: BCCL

DHFL Mumbai case

The CBI and ED arrested Kapoor again as he was alleged to have received over $100 million in kickbacks over bogus loans extended by Yes Bank to DHFL. The kickbacks were allegedly used to purchase expensive properties in Delhi and Mumbai.

Credit: BCCL

CBI files chargesheet

The CBI, on September 19, filed a charge sheet against Rana Kapoor and Gautam Thapar, chairman of Avantha Group, and directors of Oyster Buildwell Pvt Ltd, among others, in connection with a ₹466.51 crore bank fraud case.

Credit: BCCL

Why did the CBI file the chargesheet?

According to an IANS report, the investigation found that Thapar’s company had availed credit facilities from Yes Bank but had diverted these to its holding company, which was in financial stress.

Credit: Wikipedia

Markets end special trading session with gains