Key Points

Subsequent to FIRs registered by the Central Bureau of Investigation (CBI), the ED started probing the offence of money laundering by RAAGA Companies under the Prevention of Money Laundering Act (PMLA).

Other agencies and institutions also shared information with ED, such as The National Housing Bank, SEBI, National Financial Reporting Authority (NFRA), Bank of Baroda, according to reliable sources.

Preliminary investigation by ED has revealed a well-planned and thought-out scheme to divert/siphon off public money by cheating banks, shareholders, investors and other public institutions. The offence of bribing bank officials, including Promoter of Yes Bank Limited, is also under scanner.

Preliminary probe revealed illegal loan diversion of around Rs 3,000 crore from Yes Bank (from 2017 to 2019). ED has found that just before the loan was granted, the Yes Bank promoters received money in their concerns. The agency is also investigating this nexus of bribery and the loan.

The regulator has found gross violations in Yes Bank loan approvals to RAAGA companies, such as Credit Approval Memorandums (CAMs) were back-dated, Investments were proposed without any due diligence/ credit analysis in violation of Bank's Credit Policy, inter alia.

In violation of the loan terms, these loans were further diverted to many group companies and shell companies.

According to sources close to the investigation, some red flags found by ED include loans given to entities with weak financials. These are: no proper documentation of loans, no due diligence, borrowers have common addresses, common directors, etc., diversion of loans to promoter group entities, evergreening of GPC Loans, loans onward lent on same date, loans disbursed on same date as date of application, loans disbursed prior to sanction, misrepresentation of financials.

SEBI is also learnt to have shared its findings with ED in the case of RHFL. Dramatic increase in corporate loans by RHFL, from Rs 3,742.60 crore in FY 2017-18 to Rs 8,670.80 crore in FY 2018-19 is also under ED lens.

According to sources, the investigation is ongoing as the ED continues to uncover links between Yes Bank officials, group companies, and financial irregularities related to Anil Ambani’s business empire.

- IANS