Rana Kapoor
The Enforcement Directorate on Sunday arrested Rana Kapoor, the founder of Yes Bank under the charges of Money Laundering. According to the ED, Kapoor was placed under arrest around 3 am under the provision of the Prevention of Money Laundering Act (PMLA) as he was allegedly not cooperating in the probe.
Rana was questioned by the officials for over 20 hours after the central agency raided his residence on Friday night. He will be produced before a local court during the day to obtain custody, the officials said.
The arrest comes after charges of alleged financial irregularities and mismanagement in the operations of the private bank surfaced and the RBI and Union government initiated action to control its affairs. Officials said Kapoor, 62, will be produced before a local court during the day to obtain custody.
Who is Rana Kapoor?
Born on 9 September 1957, Rana Kapoor is an Indian banker. He is the founder and former managing director and CEO of Yes Bank. Kapoor is married to Bindu Kapoor. They have three daughters, Radha, Rakhee, Roshini. Kapoor was born and was brought up in New Delhi. He completed his schooling from Frank Anthony Public School, New Delhi in 1973 and went on to earn a BA degree from Shri Ram College of Commerce (1977). He then obtained an MBA degree from Rutgers University in New Jersey, US (1980). Kapoor received an honorary fellowship from All India Management Association (AIMA), President's Medal from Rutgers University, an honorary Ph.D. from GB Pant University of Agriculture &Technology.
Rana Kapoor's banking career
Rana Kapoor is known to be a risk-taker, lending to even stressed companies. In 1980, Kapoor joined Bank of America (BoA) as a management trainee. In 1990 he was presented the Eagle Pin by the chairman. He eventually went on to head the wholesale banking business which included several assignments in Asian countries. Kapoor worked at BoA for about 16 years, till 1996, managing corporate, government and financial institution clients. He was awarded the chief executive officer's award by the chairman for his performance. In 1996, Kapoor joined ANZ Grindlays Investment Bank (ANZIB) as a general manager and country head. He worked there for two years, until 1998.
Kapoor, his brother-in-law Ashok Kapur and Harkirat Singh made a proposal to the visiting team for two joint ventures: a non-banking financial company and a bank. In 1996, Kapoor held meetings with the Rabobank executives in India, Singapore and the Netherlands. The NBFC was set up in 1997, with the three Indian partners chipping in with an equity capital of ₹ 9 crore each.
In 2003, the three sold their stake for $10 million each, generating the seed fund for the bank.[7] In 2003, the team was granted a banking licence by the Reserve Bank of India (RBI) to set up Yes Bank. They established Yes Bank with the vision of "Building the Best Quality Bank of the world in India" by 2015. Rana Kapoor held 26% stake in Yes Bank, Ashok Kapur held 11%, and Rabobank International held 20% stake. Ashok Kapur died in 2008 in Mumbai 26/11 attacks.
In September 2018, Yes Bank announced that they had ordered Kapoor to step down from his CEO position in January 2019. In July 2019, the Times of India reported that with a 78% drop in the Yes Bank share price since August 2018, Kapooor's net worth had fallen by over a billion to $377 million.
What went wrong?
According to media reports, Kapoor claimed that Yes Bank was among the few lenders which recovered almost all loans given to troubled Kingfisher Airlines just before it went belly-up. In 2015, global financial services firm UBS gave a negative report on the asset quality of Yes Bank’s books, Kapoor promptly filed a complaint with the capital market regulator against the firm.
When Yes Bank for the second time reported a divergence in gross bad loans of ₹6,355 crore for FY17, Kapoor lost the battle. Kapoor started selling his shares and completely exited the bank by December 2019.
On 8 March 2020, Enforcement Directorate registered a money laundering case against him and he was arrested.
ALSO READ | Yes Bank founder Rana Kapoor, accused of money laundering, arrested
