HC grants bail to Wadhavan brothers in YES Bank loan fraud case

The ED initiated proceedings against the Wadhawan brothers based on the CBI’s FIR, which accused Kapoor of conspiracy, cheating, and violations of the Prevention of Corruption Act. The Wadhawans, however, maintained that the transactions were part of routine business operations

MUMBAI: The Bombay High Court on Tuesday granted bail to Dewan Housing Finance Corporation Limited (DHFL) promoters Kapil Wadhawan and Dheeraj Wadhawan in connection with the money laundering case registered against them by the Enforcement Directorate (ED) in the Yes Bank loan fraud.

HC grants bail to Wadhavan brothers in YES Bank loan fraud case

A single-judge bench of Justice Milind Jadhav granted bail primarily on the grounds of their prolonged pre-trial incarceration. The court noted that the Wadhawan brothers had been in custody since May 14, 2020—nearly four years and nine months—far exceeding half of the maximum sentence of seven years that could be imposed upon conviction.

“Considering the present status of the trial and no possibility of it being concluded in the foreseeable future, coupled with the applicants’ pre-trial incarceration beyond one-half of the maximum period of imprisonment which can be imposed upon conviction, the applicants are entitled to bail,” the court observed. The Wadhawans are accused of money laundering and conspiracy, allegedly in collusion with former Yes Bank CEO Rana Kapoor and others.

The Central Bureau of Investigation (CBI) registered an FIR on March 7, 2020, against the Wadhawan brothers and Kapoor, accusing them of entering into a criminal conspiracy. As part of the alleged fraud, Yes Bank extended financial assistance to DHFL in exchange for substantial benefits to Kapoor and his family through companies controlled by them.

According to central agencies, Yes Bank invested ₹3,700 crore in short-term non-convertible debentures of DHFL and ₹283 crore in Masala Bonds of the company. Simultaneously, Kapil Wadhawan, through DHFL, allegedly paid a kickback of ₹600 crore disguised as a loan to DOIT Urban Ventures (India) Pvt Ltd and Morgan Credits Private Limited. While Kapoor’s daughters own 100% of DOIT, Morgan Credits is controlled by his wife.

The ED initiated proceedings against the Wadhawan brothers based on the CBI’s FIR, which accused Kapoor of conspiracy, cheating, and violations of the Prevention of Corruption Act. The Wadhawans, however, maintained that the transactions were part of routine business operations. They sought pre-arrest bail, arguing that no fraudulent misrepresentation was made and no wrongful loss was caused to the bank.

As part of their bail conditions, the Wadhawan brothers are prohibited from leaving Maharashtra, must report to the investigating officer of the ED on the third Saturday of every month, and must furnish a personal bond of ₹1 lakh each with one or two sureties in the same amount.