EOW Adds Charges After ED Dossier
Mumbai Police's Economic Offences Wing (EOW) has expanded its investigation into alleged financial irregularities involving Yes Bank, Suraksha Asset Reconstruction Company (SARCL) and entities linked to the HDIL group. According to court filings dated August 20, the EOW added charges of cheating, forgery and using forged documents against Suraksha ARC, its promoter Sudhir Valia and others. The additional provisions — Sections 420, 467 and 471 of the Indian Penal Code — were communicated to the 47th Additional Chief Metropolitan Magistrate at Esplanade Court.
The Economic Times reported that the new charges stem from a petition filed by Lakhminder Dayal Singh, a former and suspended director of Sapphire Land Development, a subsidiary of Housing Development and Infrastructure Ltd (HDIL). The EOW acted on inputs received from the Enforcement Directorate (ED), which shared a dossier on July 29. According to the EOW's filing, after examining the documents and material provided by the ED, it concluded that additional penal provisions were required. The investigation centres on transactions estimated at around Rs 1,000 crore involving Yes Bank, HDIL, Sapphire Land Development and Privilege Power and Infrastructure Pvt Ltd (PPIPL).
The Petition and Initial Charges
The initial charges in the case were criminal breach of trust and criminal conspiracy. The Economic Times reported that the allegations claim certain assets were acquired at undervalued prices and that inflated or fraudulent claims were subsequently raised. The ED, based on an FIR filed by the Mumbai Police, is investigating possible money laundering in transactions involving stressed assets by ARCs and former Yes Bank officials.
Following Singh's petition, the ED searched 17 premises in Mumbai, Khandala and Delhi linked to Sudhir Valia and senior executives of the company, according to The Economic Times. The same report noted that former HDIL promoters Rakesh and Sarang Wadhawan are being investigated in connection with the alleged Rs 4,000 crore PMC Bank fraud.
Fresh Complaint Alleges CoC Manipulation
Separately, suspended PPIPL director Rakesh Kumar Wadhawan filed a fresh complaint with the ED on August 20, as reported by the Free Press Journal. In the complaint, Wadhawan alleged that Suraksha ARC manipulated its voting share in the Committee of Creditors (CoC) from 23.39% to 35.99% through irregular debt assignments, recognition of disputed claims and other actions during the insolvency proceedings. He alleged that this was aimed at giving SARCL greater control over the resolution process and sought an ED investigation into the claim-verification process and debt assignments.
The complaint also named Rama Subramaniam Gandhi, citing his association with Yes Bank and Capri Global Ventures Pvt Ltd, a group entity of Capri Global, which Wadhawan identified as a prospective resolution applicant for PPIPL. According to the complaint, Gandhi was appointed as a director of Yes Bank in July 2022 and became a director of Capri Global Ventures in May 2024. Wadhawan alleged that this created a potential conflict of interest because Yes Bank was connected to PPIPL's earlier financing and assignment of its loan exposure, while a Capri Global group entity was participating in the insolvency process. The complaint alleged that the arrangement could potentially facilitate access to confidential information or influence the resolution process, but it did not provide evidence that confidential information was actually shared or that Gandhi influenced the proceedings.
The complaint also alleged lapses by resolution professional Anurag Kumar Sinha, including failing to address the alleged conflict and allowing Suraksha ARC to exercise disproportionate influence. The insolvency process for PPIPL began pursuant to an NCLT order dated February 15, 2023. According to the complaint, Suraksha ARC currently holds a 35.99% voting share in the CoC, compared with 23.39% recorded earlier.
Background of the Loan Assignment
The August 20 complaint reiterated earlier allegations by Wadhawan that Yes Bank assigned PPIPL's loan account to Suraksha ARC-11 Trust in 2017. According to documents cited in the Free Press Journal, PPIPL availed a Rs 600-crore term loan from Yes Bank's Nehru Centre branch in December 2012 for an affordable housing project at Kopri-Virar. The loan was secured against development rights, project receivables and immovable properties with an aggregate value of over Rs 2,000 crore. The loan was assigned to Suraksha ARC-11 Trust on March 31, 2017, with Yes Bank's board approving the transaction the day before. At the time, outstanding dues were approximately Rs 213.6 crore, with related facilities around Rs 176.53 crore. The portfolio was assigned for Rs 155.3 crore, with Rs 23.3 crore paid upfront and the remainder via security receipts.
The complaint alleged that the loan account had not been formally classified as a non-performing asset at the time of assignment and that moratorium periods were allegedly in force. It also alleged a lack of competitive bidding and proper notice, as well as collusion between Yes Bank officials and SARCL's promoter. These allegations are part of the broader probe into suspicious circular transactions and undervaluation of assets, according to officials cited by the Free Press Journal.