A special CBI court last week rejected the bail application of Mahesh Kumar Varakh, former group executive vice-president of Yes Bank Ltd in connection with a case of financial irregularities involving Dewan Housing Finance Corporation Ltd (DHFL).
Seeking bail, Varakh’s counsel argued that the Central Bureau of Investigation had filed the supplementary charge-sheet in the case without arresting him and that the accused had cooperated with the investigations.They added that the Yes Bank board had not approved the sanction to prosecute him.
With the aim to bolster his case, his lawyers added that Varakh was innocent and one of the junior most officers in the management committee of the Bank that decided collectively on sanction and disbursal of loans and Varakh only implemented their decisions, especially that of Rajiv Anand. Anand is the former business head of the bank, who was denied bail in September this year.
The CBI in March 2020 registered FIRs against DHFL, DoIT Urban Ventures– a firm controlled by Yes Bank founder Rana Kapoor’s wife and daughters– and some other entities, their directors and promoters for financial fraud. CBI alleged that Yes Bank invested ₹3,700 crore in short term non-convertible debentures of DHFL between April and June 2018 and DoIT Urban Ventures received ₹600 crore as kickbacks from DHFL for grant of the irregular loan. Kapoor was arrested in March 2020 by the CBI.
CBI opposed Varakh’s bail plea contending that the accused played an active role in the financial fraud thereby causing wrongful loss of public money. The agency argued that a person if allowed bail after misappropriating huge public funds would act as encouragement to many others to commit similar crimes.
The court said that Varakh as the group executive vice-president of the bank had higher responsibility to protect its interests but he acted on the insistence of Rana Kapoor or Rajiv Anand against the bank’s interest.The court said the facts and circumstances showed Varakh was prima-facie complicity in conspiracy with other co-accused, more particularly with Rana Kapoor and Rajiv Anand.
The court also said that he played an active role with fraudulent and dishonest intention in sanctioning and disbursement of loans by ignoring various objections.
“Not only this, he is a party to backdated sanction orders,” said the court. He has also not verified utilisation of loan amount which is necessary while disbursing sanction loan amounts. The disbursements were made despite no physical developments made in projects and the land was occupied by slum dwellers, the court said while denying Varakh bail.
Special CBI judge S U Wadgaonkar accepted the prosecutor’s argument and rejected Varakh’s bail application, observing that in view of the gravity and nature of offence and in the larger interest of society.
The court said that even if for the sake of arguments it is assumed that there was insistence from and influence used by other accused – Yes Bank founder Rana Kapoor or the then business head Rajiv Anand, the accused working as Group Executive Vice-President of the Bank had higher responsibility to protect the interests of the bank. Instead, he acted on the insistence Rana Kapoor or Rajiv Anand against the interest of the bank, the court added.
The court said the facts and circumstances show Varakh’s prima-facie complicity in conspiracy with other co-accused, more particularly Rana Kapoor and Rajiv Anand in the conspiracy.
The court added that though the actual beneficiary of crime proceeds in the case were Wadhawan Brothers of DHFL and Rana Kapoor’s family, the accused despite being a responsible officer, played an active role with fraudulent and dishonest intention in sanctioning and disbursement of loans by ignoring various objections.
“Not only this, he is a party to back dated sanction orders,” said the court. He has also not verified utilisation of loan amount which is necessary while disbursing sanction loan amounts. The disbursements were made despite no physical developments made in projects and land was occupied by slum dwellers.”