Yes Bank fraud case: Wadhawans sent to CBI custody till Wednesday

The special CBI court on Monday remanded Dheeraj and Kapil Wadhawan of Diwan Housing Finance Corporation Limited (DHFL) in Central Bureau of Investigation (CBI) custody till April 29.

The lawyer for the brother objected to the custodial interrogation of both calling their arrest as illegal. The court held that the investigation is at a primary stage and therefor detailed investigation is necessary to reach a proper conclusion. The court also refused to entertain the bail plea of the accused observing that it cannot be considered at this stage as they both are remanded to CBI custody.

Two brothers were arrested by the CBI from their bungalow in Mahabaleshwar on Sunday afternoon and were brought to Mumbai. On Monday morning the agency produced the two before the special court and sought their custody for eight days.

The CBI prosecutor Ashok Bagoria, argued that the case is of serious nature relating to a huge amount. The prosecution alleged that the accused are linked with a former senior officer of Yes Bank – Rana Kapoor. The prosecution also submitted that they were issued notice to join investigation but they failed followed by which CBI had to obtain a warrant against the two.

According to the CBI FIR, between April and June 2018, Yes Bank invested ₹3,700 crore in short-term debentures of DHFL, which is till date not redeemed. It is further alleged that Yes Bank had sanctioned loan to RKW developers, where Dheeraj is a director and the whole amount was siphoned off by Kapil. CBI has alleged that In return, Wadhawan allegedly “paid a kickback of ₹600 crore” to Kapoor and family members in the form of loan to DoIT Urban Ventures (India) Pvt Ltd.

The plea was objected by Wadhawan’s lawyer Amit Desai and Subodh Desai. They pleaded that the arrest of the accused is unconstitutional and illegal, hence there is no question of sending them to CBI custody. Further, the defence pleaded for bail of the two.

The defence pleaded that the prosecution obtained an arrest warrant without informing them. It was pointed out that the execution of the warrant was stayed by the special court till May 5. In between the stay was lifted by the special CBI court on April 25. The defence pleaded that the order of the special court lifting stay is illegal, hence Desai pleaded that the demand for CBI custody of Wadhawan brothers be rejected.

After hearing the prosecution and the defence argument, special judge AS Sayyad observed, “From the case papers it appears that Rana Kapoor, who is proprietor, director and chief executive officer of M/s Yes bank limited entered into a criminal conspiracy with the present accused for extending financial assistance to their respective companies and allegedly obtained undue pecuniary advantage from M/S DHFL from the companies of the accused.”

The court rejected the argument of the defence that the order dated April 25 lifting the stay on the execution of the arrest warrant is illegal. The court held that the order of April 25 was not to be stayed or set aside by the higher court, hence it is still in existence.