The CBI claims Yes Bank lost more than Rs 2,700 crore after Rana Kapoor invested heavily in Anil Ambani-led companies. The charge sheet accuses both of criminal conspiracy, cheating, and corruption.
Yes Bank reportedly faced a massive loss of over Rs 2,700 crore due to what investigators describe as a “unilateral decision” made by the bank’s co-founder, Rana Kapoor, to invest heavily in the financial companies owned by industrialist Anil Ambani.
This revelation has been made in the Central Bureau of Investigation’s (CBI) charge sheet, which concerns alleged fraudulent transactions between Yes Bank and entities belonging to the Anil Dhirubhai Ambani (ADA) Group.
The CBI, in its latest charge sheet filed last month, has named 13 people and entities, including Anil Ambani, Rana Kapoor, and members of Kapoor’s family.
The charges include criminal conspiracy, cheating, and corruption linked to loans and investments made during Kapoor’s tenure as the Managing Director and Chief Executive Officer (CEO) of Yes Bank.
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The investigation is also looking into the role of Anil Ambani’s son, Anmol Ambani, who was the Executive Director of Reliance Capital at that time.
The agency said,
“further investigation was on regarding the role of Anil Ambani’s son Anmol Ambani, the then executive director of Reliance Capital, in the case.”
According to the charge sheet, the case originates from two separate complaints filed by the Chief Vigilance Officer (CVO) of Yes Bank.
It was found that during Rana Kapoor’s leadership, the bank made investments worth Rs 5,010 crore in ADA Group’s financial companies between 2017 and 2019.
Out of this total investment, Yes Bank had invested Rs 2,965 crore in non-convertible debentures (NCDs) of Reliance Home Finance Limited (RHFL) and Rs 2,045 crore in commercial papers of Reliance Commercial Finance Limited (RCFL).
However, as per the charge sheet,
“out of the total amount, Rs 3,337.5 crore turned Non Performing Investment (NPI) by December 2019.”
The bank could not recover the full amount from the securities attached to these investments, leading to an overall loss of Rs 2,796.77 crore.
The CBI charge sheet further revealed that several ADA Group entities were actually shell companies. It stated,
“The primary purpose of these shell companies was to receive funds from RHFL and RCFL, and subsequently route funds to other ADA Group companies to discharge their existing financial liabilities.”
The agency alleged that these complex financial transactions were not genuine investments but part of a larger “quid-pro-quo” arrangement between the Ambani-led ADA Group and the Kapoor family.
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The charge sheet stated that Rana Kapoor,
“working as a public servant along with his wife (Bindu Kapoor) and daughters (Radha and Roshini Kapoor) entered into a criminal conspiracy with Ambani, the then chairman of ADA Group.”
It was further alleged that Rana Kapoor
“unilaterally decided to subscribe to NCDs, knowing fully that there was no demand for these NCDs in the secondary market and holding them for a longer period would be detrimental to Yes Bank.”
According to the CBI, companies led by Bindu Kapoor availed of credit facilities worth Rs 570 crore from RHFL and RCFL at a lower interest rate, allegedly “under the instructions of Anil Ambani.”
As per standard banking protocol, Rana Kapoor was required to disclose any loans or credit facilities availed by his family members’ companies. However, the charge sheet highlighted that he “intentionally and dishonestly did not disclose” this information.
Adding to the list of irregularities, the charge sheet mentioned that Reliance Nippon Mutual Fund subscribed to NCDs worth Rs 1,160 crore of Morgan Credits Private Limited, a company owned by Kapoor’s daughters, at a lower rate of interest.
The CBI also said that Reliance Nippon Mutual Fund
“invested an amount of Rs 2,250 crore in Yes Bank AT-1 Bonds (a type of hybrid capital instrument that banks issue to meet regulatory capital requirements) through private placement and secondary market under the influence of Anil Ambani.”
According to the agency, this arrangement violated SEBI’s mutual fund regulations, which prohibit Anil Ambani from directly investing the funds of Reliance Nippon Mutual Fund into his own financial companies.
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The CBI said,
“He achieved it indirectly by subscribing to NCDs and investments in AT-1 bonds of Yes Bank.”
Through these arrangements, the CBI alleged,
“The Rana Kapoor-led bank subscribed to NCDs of RHFL and RCFL and thus money was routed back to Ambani’s company.”
The probe agency concluded by stating that it was still
“probing the role of Anil Ambani’s son in subscribing to NCDs of Morgan Credits and Reliance Nippon Mutual Fund’s investment in AT-1 bonds.”
This case exposes the deep-rooted corruption and conflict of interest between Yes Bank’s former leadership and one of India’s biggest industrial groups.
The investigation, still ongoing, may uncover further evidence about how corporate power and personal gain allegedly led to massive financial losses in one of India’s major private sector banks.
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