Delhi HC dismisses Gautam Thapar's plea challenging arrest in Yes Bank loan fraud

12:13 September 30

New Delhi: The Delhi High Court on Thursday dismissed the plea filed by Avantha Group promoter Gautam Thapar challenging his arrest in connection with the Yes Bank loan fraud case. Thapar was arrested for allegedly diverting Rs466 crore to Yes Bank. A bench of Justice Yogesh Khanna dismissed 20 petitions.

The Central Bureau of Investigation (CBI) had registered a case against Gautam Thapar, the promoter of Avantha Group for a loan fraud involving 466 crore rupees from the troubled Yes Bank. According to the CBI, Oyster Buildwell Pvt Ltd, OBPL, a subsidiary of Avantha Group, acquired the loan to fund its power projects. An audit had revealed the loan was diverted to repay the loans of Avantha Group, the investigator said. The probe came after the company started defaulting on the loan.

The Enforcement Directorate (ED) had on August 3 raided the offices and residence of the accused persons and had arrested Thapar under provisions of the Prevention of Money Laundering Act (PMLA). The agency had carried out raids against him and his linked businesses in Delhi and Mumbai.

The ED has been probing an alleged transaction between his company Avantha Realty, Yes Bank co-founder Rana Kapoor and his wife, who are already being investigated under the PMLA by the agency. The case of money laundering was filed by the ED after taking cognisance of an FIR lodged by the CBI.

CBI had last year booked Kapoor and his wife Bindu for allegedly obtaining a bribe of Rs307 crore through the purchase of a bungalow in Delhi from a realty firm at half the market price and facilitating around Rs1,900 crore bank loans to it in return. The CBI suspected that the discounted transaction for the 1.2 acre-bungalow on Amrita Shergill Marg in Delhi was a gratification to Kapoor through the company Bliss Abode Pvt Ltd in return for non-realisation of over Rs1,900 crore in loans from Yes Bank to Gautam Thapar-promoted Avantha Realty and group companies.

Crisis-hit Yes Bank

Yes Bank was one of the busiest banks in the country after it was launched in 2004. The first signs of trouble hit the bank in 2015 when UBS, a global financial services company, raised doubts about its asset quality.

According to reports, UBS said Yes Bank loaned more than its net worth to companies that were unlikely to repay. But the bank continued to extend loans and became the fifth-largest lender in the private sector. As more light fell on the bank's activities, analysts could see the bank was lending to sectors that were struggling in the past few years, such as, non-banking financial companies, real estate and construction firms. As a result, the bank's non-performing assets or NPA started to rise steadily.

According to reports, The Reserve Bank of India or RBI warned the bank for underreporting its NPAs. The crisis deepened with debtors failing to pay back and the loss of public confidence in the bank. Reports suggested up to Rs18,000 crores were withdrawn by depositors between April and September in 2019.

On March 5, 2020, the RBI imposed a moratorium on Yes Bank, which limited withdrawals to Rs50,000 among other curbs. A few days later that year, investigators arrested the bank's 63-year-old co-promoter, Rana Kapoor, over kickbacks paid to him and members of his family for loans provided to a number of high-profile borrowers.