It was the darling of investors not very long ago. However, in 17 months Yes Bank found itself in a position of hopelessness thanks to the Reserve Bank of India (RBI) moratorium a few days back. The diamond had suddenly turned dust and the man responsible for it was none other than its founder Rana Kapoor. Shares of Yes Bank which at went one point to time rose to its highest of Rs 406 plummeted rapidly down to Rs 16.
And today, the man behind it all finds himself unshaved, unkempt remanded till March 11 in the custody of the Enforcement Directorate (ED). No more living for him now at least for the next few days in the Rs 128 crore luxurious house he bought in Mumbai just besides the residence of Mukesh Ambani.
Rana no doubt, as long as he did not fall, led a life of an eyeball seeking industrialist. He was involved in everything – banking, IPL and lifestyle – all seem the perfect script of a potboiler Hindi film. Some have even linked him to Dawood Ibrahim’s ‘D Company’. What else does one need to make a smashing hit film.
Born in 1957, Rana came from an affluent family and graduated from Shri Ram College of Commerce in Delhi before going abroad and obtaining an MBA degree from Rutgers College in New Jersey. He started his banking career with American Bank in 1980. He eventually went on to head the wholesale banking business of the company which included several assignments in Asian countries. Kapoor worked at BoA (name changed) for about 16 years, till 1996, managing corporate, government and financial institution clients.
However, his fortune for the better happened in 1995. That year in February, a team from Rabobank arrived in India, scouting for opportunities. Rana, his brother-in-law Ashok Kapur and Harkirat Singh made a proposal to the visiting team for two joint ventures: a non-banking financial company (NBFC) and a bank. It was accepted and the NBFC was set up in 1997, with the three Indian partners contributing equal contributions of Rs 9 crore each in the equity capital. In 2003, the three sold their stake for $10 million each, generating the seed fund for the bank. In 2003, Rana and his associates were granted a banking licence by the RBI to set up Yes Bank. It was established with the vision of ‘Building the Best Quality Bank of the world in India’ by 2015. Rana held 26% stake in Yes Bank, Ashok 11%, and Rabobank International 20% stake. Unfortunately Ashok died in 2008 in Mumbai 26/11 attacks.
Then troubles started for Rana. First he got involved in a bitter and lengthy legal dispute with Ashok’s wife as to who should succeed him in the board of directors. Rana won the battle, but it certainly damaged the reputation of Yes Bank.
Sanity prevailed for same time after that. It was during this time Rana and his elder daughter Radha became very family faces in the IPL circuit. Cricketers of all countries used to frequent Rana’s residence quite frequently. Radha was also the managing director of Yes Bank and had access to lot of places as she flaunted her power. In 2017 Bloomberg declared Rana as a billionaire due to the rising price of shares of Yes Bank.
Then began the fall. In September 2018, the Yes Bank board announced that they had ordered Kapoor to step down from his CEO position in January 2019. There were also reports that with a 78% drop in Yes Bank’ shares Rana’s net worth had fallen.
In July 2019, a section of the media reported that with a 78% drop in the Yes Bank share price since August 2018, Rana’s net worth had fallen by over a billion dollars to $377 million. The end was in sight.
The ED has alleged that Rana had approved of loans to many debt-ridden companies. In turn these companies whose loans got approved gave the money to Rana and his family members, thereby misusing public wealth. Plenty of former top officials of the bank have told ED that loans were approved at the insistence of Rana. That became the final nail in the coffin for Rana and now even if for a short while his time is behind bars.
The circle is complete for Rana Kapoor… will he be able to create a new circle again. Chances are very minimal indeed.
PNN & Agencies