Yes Bank fraud case: Mumbai court denies anticipatory bail to Sudhir Valia

A Mumbai court rejected businessman Sudhir Valia’s request for anticipatory bail in a case tied to an alleged Rs 1,000-crore fraud linked to Yes Bank. The court said the accusations appear serious at first sight. The court also said investigators need custodial questioning of Valia to examine the alleged transactions and related records.

Representative image

Additional Sessions Judge Anil D Salunkhe said custody was needed due to the scale of the suspected economic offence. The judge noted: "Considering the seriousness of the alleged economic fraud committed by applicant Valia with collusion of the officials of Yes bank and its consequences, the custodial interrogation of the applicant is essential,\" while dismissing the plea.

Yes Bank fraud case and court findings

After hearing both sides and reviewing the FIR, the court said the key claims target Valia and certain Yes Bank officers. The order stated: \"As per the FIR, they, in collusion with each other, created forged record to grab the property of more than Rs 1,000 crore mortgaged by the informants company in favour of Yes Bank against Rs 150 crore loan obtained from the private lender for a period of three years,\"

The court also observed that the alleged fraud involved sums running into crores. Judge Salunkhe added: \"According to me, prima facie record does not show involvement of the applicant in the case as false or to malign his reputation,\" while refusing pre-arrest protection to Valia. Yes Bank co-founder Rana Kapoor is also named as an accused.

Yes Bank FIR details and property transfer allegations

Mumbai Police’s Economic Offences Wing has filed a fresh FIR naming Kapoor, Valia, and others. Valia is a director of Suraksha Asset Reconstruction Ltd, known as Suraksha ARC. The case concerns an alleged illegal transfer of mortgaged properties said to be worth Rs 1,000 crore.

The FIR was registered at Worli police station based on a complaint by Lakhminder Dayal Singh. Singh is linked to Saffair Land Development, described as a sister concern of Housing Development and Infrastructure Ltd, or HDIL. The complaint points to dealings tied to HDIL group companies and Yes Bank’s Worli branch.

According to the FIR, Privilege Power and Infrastructure, an HDIL group firm, took a Rs 300-crore loan in 2015. It also says Saffair Land Development sought a Rs 150-crore loan during a financial crisis. Yes Bank sanctioned that loan in 2016, with repayment due within 36 months.

The FIR says properties worth Rs 1,000 crore, belonging to HDIL and group firms, were mortgaged to secure the Rs 150-crore loan. It adds that Singh learnt in June 2018 that Yes Bank had authorised Suraksha ARC to recover Rs 176.53 crore. The FIR says the repayment period had not ended then.

Singh alleged the mortgaged assets were transferred to Suraksha ARC even though the firm was not declared an NPA. This point was noted in a 2019 special audit report, the FIR said. Singh also claimed the assets were sold at below-market rates.

The complaint further alleged that Yes Bank arranged Rs 22.5 crore as margin money for Suraksha ARC. It said this was routed through multiple accounts as part of a conspiracy. The purpose, Singh alleged, was to take control of the mortgaged properties.

Yes Bank EOW arguments and defence claims

In the pre-arrest plea, Valia denied wrongdoing and said the case was filed with malice. The plea stated: \"The entire case is an attempt by a suspended director to weaponize the criminal justice system over a concluded, fully documented financial transaction,\" It also said Valia was one of six directors of Suraksha ARC, a public limited company.

Valia’s plea also said: \"The FIR fails to attribute any specific meeting, email, instruction, or overt act to him personally, nor does it allege that he received any wrongful personal gain,\" Valia argued that the complaint did not show direct actions by Valia or personal benefit from the alleged deal.

Additional Public Prosecutor Ashwini Rayakar, appearing for the EOW, said Valia and Suraksha ARC acted with Yes Bank officers from the start. Rayakar also addressed the delay issue raised by the defence. Rayakar said the alleged fraud surfaced after the informant checked an audit report.

Rayakar told the court that the accused acted covertly and did not give notice to the company. Rayakar also said key paperwork is held by bank officials and Valia. Rayakar argued that a complete probe cannot proceed without Valia’s custodial interrogation.

The court’s order left Valia without pre-arrest protection as the investigation continues. The FIR alleges that the disputed property transfer involved mortgaged assets and internal records. The EOW is examining the loan, recovery steps, and the alleged role of Yes Bank officers, Suraksha ARC, and other accused.

With inputs from PTI