The first charge sheet filed against the co-founder and former chief executive of Yes Bank, Rana Kapoor, his wife, three daughters and three companies linked to their family, by the Enforcement Directorate in money laundering case.

ILN Master (1)

Money laundering is an act of making large amounts of money generated by a criminal activity appear to have come from a legitimate source. It is itself a crime. It involves three steps:

  1. Placement
  2. Layering
  3. Integration

Any person or organization, if found guilty of money laundering, is charged under the Prevention of Money Laundering Act, 2002.

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Facts of the case

  • The ED on Wednesday filed it’s first charge sheet in the Yes Bank money laundering case against the co-founder and former chief executive Rana Kapoor, his wife, three daughters and three linked companies.
  • The estimated size of fraudulent deals is₹5,050 crores and the Kapoor family is accused of receiving₹600 crores as kickbacks in return for Yes Bank extending questionable loans.
  • Ed, in it’s chargesheet to a special PMLA court, accused Yes Capital, Morgan Credits and RAB Enterprises of receiving gratification in lieu of loans to borrowers.
  • During investigation, Ed found that Yes Bank had lent 3,700 crore to Dewan Housing FinanceLtd. Against debentures issued by the company in April-June 2018 and DHFL sanctioned a loan of worth ₹600 crore to Doit Urban Ventures ( a company fully owned by Kapoor daughters).
  • According to ED the 600 crore loan to Doit was a kickback to the Kapoor family in lieu of loans from Yes Bank.

Legal Stand Points

After the investigation, the Enforcement Department, submitted the charge sheet to a special Prevention of Money Laundering Act (PMLA) court.

PMLA is an act of Parliament of India enacted by the NDA government to prevent money laundering and to provide confiscation of property derived from money-laundering.

Prevention of Money-Laundering Act, 2002

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Chapter II Offence of Money-Laundering

  1. Offence of money-laundering.-

Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.

  1. Punishment for money-laundering.—Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees: Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted.


Legal opinion

There are several techniques used by money laundering experts, but all of them share some common characteristics. The direct or indirect effect of the offenceof money laundering is faced by the society and the economy. It is a process vital to making crime worthwhile. It allows the drug traffickers, smugglers, and other criminals to expand their operations. Money laundering may lead to the transfer of economic power from the market, the government and the citizens to the criminals, abetting crimes and corruption.

Money laundering impairs the development of legitimate private sector through the supply of products priced below production cost, making it difficult for the legitimate industries to compete.

For the victims of crimes enabled by laundered money, the effects can be devastating and lifelong, including great personal and family loss, in addition to ruined business reputations.

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‘Rules and regulations can make crime like money laundering seem distant, and removed from everyday life. Compliance can become just a tick-boxing exercise’, says Phillippa Foster Back CBE, Director for the Institute of Business Ethics (IBE).

While coping with this crime, not only regulatory measures play a vital role, but the social aspects should also bi minutely observed.

In this case, After Yes Bank failed to raise enough money to stay afloat, the RBI seized the lender and ED arrested Kapoor three days later suspecting irregularities in loans granted to Dewan Housing Finance Ltd. Also,ED has so far scanned 100 entities which it suspects are shell structures. The required proceedings shall be carried on under the Prevention of corruption Act.

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For case specific advice, please contact best/top/expert Criminal Lawyers in Chandigarh Panchkula Mohali Zirakpur Kharar Derabassi Baltana etc.

This post is written by Riya Rana.

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