This book examines how Rana Kapoor led Yes Bank to its downfall (and was arrested)

Much before the fall of YES Bank, an asset manager who had been close to the NDA government, once told me, “Rana pakka andar jaayega. Aap dekhte jaaiye, sir (Rana Kapoor will be arrested for sure. You just wait and watch).” One of Rana Kapoor’s industrialist friends, who I interviewed during the course of the book, said that Rana knew he was going to be arrested by the ED right in January end.

“He tried adjusting his books by that time and settling the accounts,” the friend said. This probably explains his trip to London in the middle of January. And the asset manager wasn’t wrong, for Rana Kapoor was arrested on Saturday, 7 March 2020, two days after the fall of YES Bank.

Rana was a man who, till two years ago, thought of himself as invincible.

In 2017, at his eldest daughter’s wedding, Union Minister Piyush Goyal and his wife were at the reception, posing with the Kapoor family. Tata Sons chairman N Chandrasekaran, and Bollywood superstars Shahrukh Khan and Salman Khan were also there. But there was no one around as his deeds (or misdeeds, as the court decides), landed him in jail.

The political pressure was huge: after all, it was the fourth largest private bank that had failed. Had the RBI waited for fifteen more days, the bank would probably have been bankrupt, triggering a situation similar to the global financial crisis in the US during 2008, when global banks were collapsing like a pack of cards. Everyone in the financial industry was baying for Rana Kapoor’s blood. “The government will fall if it doesn’t come up with anything concrete, there will be chaos,” one bank chief told me on 7 March.

Within hours, Rana Kapoor was arrested by the ED.

From 5 March till 19 March, the ED tried to establish the flow of money, interrogated Rana Kapoor six times and recorded his statements. Other than Rana, there were seven more statements that were recorded.

The first statements to be recorded were of the people associated with DHFL and the Wadhawan family – CA Sonpal Jain and Rajendra Mirashie, the head of project finance at DHFL. On the same day, Rana Kapoor’s eldest daughter, Radha Kapoor Khanna, was interrogated. On 11 March, his youngest daughter, Roshini Kapoor, and YES Bank’s former CEO Ravneet Gill were quizzed. The statements, which have been enlisted in the chargesheet, were recorded till 19 March. A lot surfaced in those rounds of questioning.

Unlike a police statement, where an accused can change his statement in the court, the statements taken by the ED go on record in the court of law. Rana Kapoor was not cooperative in the questioning by the ED. He is allegedly said to have changed his statements multiple times. But why was he not cooperating? Many who watched the developments closely felt that Rana was trying to shield his daughters. “He was very careful. It was clear that he was trying to shield his daughter,” one person who followed the ED investigations closely told me.

Yes, Rana was very protective of his family. Back in 2012, a video of a young lady in a lip-lock with a Bollywood heart-throb got leaked on the Internet. Afterwards, it was alleged that it was one of Rana’s daughters, who was a minor back then. Soon, the video disappeared from the Internet. Many, who have followed Rana closely, say that it was he who got that video removed from the website.

Other than his family, Rana Kapoor had many allies but no friends.

People who covered the ED, told me, during the course of the interviews, that it was only Rana Kapoor’s wife, Bindu Kapoor, and Aditya Khanna, Radha Kapoor Khanna’s husband, who regularly visited him in jail. In fact, one of his few friends, who was acting as a shield for him during the trial, had some harsh words to say about him. “He [Rana] has become way too arrogant,” he said.

Probably, Rana Kapoor, because of this arrogance, earned more foes. According to a senior business journalist, “Every business has some wrongdoing. But the thing is how soon can you correct it and how far you go. Probably he (Rana Kapoor) went too far.” Over the years, Rana Kapoor had narrowed his circle down due to internal fears. He became more and more of a family man.

“From what was coming out on a daily basis, it was clear that Rana Kapoor was a kind of insecure man,” a journalist who tracked the YES Bank fallout closely said. In a contrarian point of view, it was a “big brother club”, where the partners dump you once you get caught.

But law enforcement agencies have their own way of making people speak. In the PMC Bank scam, when Sarang Wadhawan, aka Sunny Dewan, was arrested, he acted arrogant in front of the ED and was allegedly made to stand all night to break his silence. “In Rana Kapoor’s case, they could even reduce access to home-cooked food. It would have disturbed him, as he wasn’t keeping well,” a senior journalist told me.

In fact, in the bail plea, his advocate told the court that he suffers from a chronic immunodeficiency syndrome which causes recurrent lung, sinus and skin infections. “This combined with his history of longstanding bronchial asthma since childhood still requiring inhalers put him at high risk of a severe lung infection which can lead to death,” it stated and added that he needed to be kept at a distance from other prisoners.

Excerpted with permission from The Banker Who Crushed His Diamonds: The Yes Bank Story, Furquan Moharkan, Penguin Books.