Yes Bank Probe: Wadhawans Cite Covid-19 Threat, Reject Enforcement Directorate’s Summons
Customers stand in line outside a Yes Bank branch in Mumbai, on March 6, 2020. (Photographer: Dhiraj Singh/Bloomberg)

Yes Bank Probe: Wadhawans Cite Covid-19 Threat, Reject Enforcement Directorate’s Summons


After skipping enforcement directorate summons thrice, promoters of crisis-hit Dewan Housing Finance Corporation Ltd., Kapil and Dheeraj Wadhawan, have cited Covid-19 pandemic for their non-appearance in connection with the money laundering probe against Yes Bank Ltd. founder Rana Kapoor and others, officials said on Wednesday.

The Wadhawan brothers, who denied any wrongdoing in their dealings with the bank, were supposed to appear before the central agency on Tuesday at its office in south Mumbai. The ED has summoned them thrice, with the first communication for deposition sent on March 10.

DHFL Chief Managing Director Kapil Wadhawan and non-executive director of the company Dheeraj Wadhawan are already being probed by the agency as part of a separate money-laundering probe related to late Mumbai gangster Iqbal Mirchi. Kapil Wadhawan, 47, was also arrested by the agency in the case, but he is now out on bail.

Their role is now being probed by the Enforcement Directorate in the criminal case filed against Kapoor for receiving alleged kickbacks, through companies purportedly controlled by his family, for going slow on bad loans, extended by his bank to some big corporates. "I have been travelling due to health-related issues, which I have mentioned in my earlier letters along with my doctor's certificate and of which you are also aware of," Kapil Wadhawan wrote to the ED.

"Considering the COVID-19 pandemic, with my already compromised health and age I am at high risk and consequently for my own health and safety it is difficult for me to travel back to Mumbai," he said. Further, he wrote, it was a government directive to curtail travel in view of the current environment of coronavirus.

He added that media reports and ED's remand application tell him that he is required in a probe related to a loan disbursement to DoIT Urban Ventures Pvt. Ltd., a firm alleged by the agency to be Kapoor's family enterprise, being a kickback of the Rs 3,700 crore non-convertible debentures of DHFL being issued to Yes Bank. Kapil Wadhawan said the "entire process was in accordance with the SEBI guidelines and at no point were there any allegations about any preferential allotment to Yes Bank."

He argued that as the Enforcement Directorate has all the documents related to the new case, he is not able to understand as to what "assistance" can he give to the agency by appearing before it. He also asked the agency to provide him a "questionnaire" on the latest charges so that he can respond to them.

Also read: Yes Bank Crisis: RBI Cannot Differentiate Between AT-1 Bondholders And Promoters, Axis Trustee Says

"Further, the allegations with regard to the loans disbursed to the Department of IT being a kickback to Mr. Rana Kappor are incorrect. As far as I can recall in respect of the loan of Rs 600 crore, there were six immovable properties that were offered as security and over which mortgages were created," Wadhawan said. His brother Dheeraj Wadhawan has also taken a similar plea and mentioned identical grounds in his communication to the ED stating that "in today's circumstance in the country, health is a priority".

Officials in the agency said the Wadhawan brothers were not honouring the due process of law and trying to evade legal proceedings in the case that are being conducted under the Prevention of Money Laundering Act. It is expected that the ED may now issue the brothers' new summons for appearance or move a court seeking cancellation of the bail granted to Kapil Wadhawan in the case related to Iqbal Mirchi. It has already moved a Mumbai court for getting issued a non-bailable warrant against Dheeraj Wadhawan in connection with the Iqbal Mirchi case.

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