The Enforcement Directorate (ED) on Monday questioned Yes Bank founder and its former chief executive officer Rana Kapoor in a money-laundering probe into alleged financial irregularities involving industrialist Anil Ambani and companies linked to the Anil Dhirubhai Ambani Group (ADAG).

Kapoor’s statement was recorded under the Prevention of Money Laundering Act.

Anil Ambani and his Reliance Group of companies are facing a probe for alleged irregularities in multiple bank loans worth approximately ₹17,000 crore.

“Rana Kapoor and Anil Ambani entered into a ‘quid-pro-quo’ arrangement that resulted in significant losses for Yes Bank. During Kapoor’s tenure, the bank’s exposure to ADAG companies increased sharply, rising from around ₹6,000 crore as of March 31, 2017, to nearly ₹13,000 crore by March 31, 2018,” said an ED official.

During this period, Yes Bank is alleged to have invested more than ₹5,000 crore in ADAG-linked entities, including Reliance Home Finance Limited (RHFL) and Reliance Commercial Finance Limited (RCFL).

"A large portion of these investments turned into non-performing investments (NPI). The bank subsequently suffered a loss of approximately ₹3,300 crore from these dealings. These were not standard business transactions but a ‘quid pro quo’. In exchange for Yes Bank’s investments, ADAG companies granted loans to firms controlled by Rana Kapoor’s family members,” said the agency official.

The probe has also found that Kapoor and Ambani held several private business meetings without the presence of other senior Yes Bank officials, during which the alleged arrangements were finalised. Following these meetings, Kapoor allegedly directed bank officials to process and approve proposals that were allegedly non-genuine and did not conform to standard banking norms, the official said.

Sources said Kapoor’s questioning was part of a wider investigation into suspected criminal conspiracy, abuse of official position and financial misconduct.

Yes Bank allegedly invested ₹2,965 crore in RHFL instruments and ₹2,045 crore in RCFL instruments between 2017 and 2019. By December 2019, these investments had turned into non-performing assets. The bank's outstanding exposure stood at ₹1,353.5 crore for RHFL and ₹1,984 crore for RCFL.

Besides, R-Com and its group companies took loans amounting to ₹40,185 crore from domestic and foreign lenders between 2010 and 2012, of which five banks have declared the loan accounts as fraudulent.

The probe revealed that loans taken by one entity from one bank were utilised for repayment of loans taken by other entities from other banks, sources said.