On April 23, it was revealed that disgraced banker Rana Kapoor has admitted in front of the Enforcement Directorate (ED) that he was forced to buy an MF Hussain painting from Priyanka Gandhi Vadra for Rs 2 crores. He further mentioned in his confession to ED that he was promised Padma Bhushan in exchange for the money. The amount he paid was allegedly used for Congress leader Sonia Gandhi’s treatment in New York. Here is all you need to know about Rana Kapoor, the painting in question, and the Yes Bank scam.
Who is Rana Kapoor?
Rana Kapoor is the co-founder, former Managing Director, and former Chief Executive of Yes Bank. Born and brought up in Delhi, Kapoor did his schooling at Frank Anthony Public School, New Delhi. He graduated from Shri Ram College of Commerce, Delhi University, and did his MBA from Rutgers University in the United States.
Kapoor started his banking career as a junior banker in the Barakhamba branch of Bank of America. He worked there for 16 years. After a short stint at ANZ Grindlays for three years, he joined hands with his brother-in-law Ashok Kapur and Harkirat Singh to form Rabo India Finance. In 2003, all three sold their equity and got a license to set up a private bank. In 2004, Yes Bank was established. In 2019 he stepped down from the post of CEO.
What is the Yes Bank scam?
Everything was fine till March 2014 with Yes Bank. It had a loan book of Rs 55,633 crores, and deposits were Rs 74,192 crores. However, within five years, by September 2019, the loan book grew four times and touched 2.25 trillion, but the deposits were less than three times the loan book. The Bank came under the Reserve Bank of India’s scanner after it accumulated a torrent of bad loans in 2018 to defaulters like DHFL, Café Coffee Day and Jet Airways.
The Bank was put on a moratorium by RBI for a 30-day period. The withdrawals were capped at Rs 50,000 for the period. RBI then announced ‘Yes Bank Ltd. Reconstruction Scheme, 2020’, changing the authorised capital to Rs 5000 crores and 2400 equity shares standing at Rs 10 each. In addition, SBI, which leads the consortium of banks investing in the ‘reconstructed bank’, will not reduce its holding below 26% before the completion of three years.
The Enforcement Directorate grilled Rana Kapoor in the matter under money laundering charges, and after 15 hours of questioning, he was arrested on March 8, 2020, under the provision of the Prevention of Money Laundering Act (PMLA).
How is the Gandhi family linked with Rana Kapoor?
Subsequent to his arrest, it was revealed that the Gandhi-Vadhra family was linked to the Yes Bank scam. Reports suggested the Income Tax department has found an alleged nexus between former Yes Bank promoter Rana Kapoor and Gandhi-scion Priyanka Gandhi Vadra. It was alleged that Kapoor had close ties with the Gandhis. During questioning, he confessed to buying an MF Hussain painting from the Gandhis for Rs 2 crores.
What is the controversy about the painting of MF Hussain?
The MF Hussain Painting was given to former Prime Minister Rajiv Gandhi by the painter himself in 1985 during the centenary celebrations of Congress. The ownership of the painting came under controversy as ex-PM Rajiv Gandhi was Prime Minister at that time. There were speculations if the gift was accepted by Rajiv Gandhi in his personal capacity or as the Prime Minister of India.
If the painting was gifted to the Prime Minister of India, it became public property. In that case, Priyanka Gandhi did not have the right to sell it or even own it in the first place. If the painting was gifted to the Congress party, it would have been the grand old political party to own the rights of the painting. Again, in that case, Priyanka Gandhi, Sonia Gandhi or Rahul Gandhi would not have any rights to sell the painting unless the party gave them a power of attorney.
If the painting was gifted to Rajiv Gandhi in his personal capacity, then it would have been owned by all three, Sonia Gandhi, Rahul Gandhi, and Priyanka Gandhi, in case there was no will. There is no clarity as to whom it was gifted and who owned it after Rajiv Gandhi was replaced as Prime Minister of India.
Though Prime Ministers are allowed by law to keep the gifts they receive during their tenure, the price of the item can not exceed Rs 5,000 if they want to retain it. Thus, if the painting was gifted to the chair, it would be wrong on the Gandhi family’s part to retain the painting after Rajiv Gandhi was replaced as PM.
In 2020, a letter was made public where Priyanka Gandhi Vadra acknowledged the sale of the painting that was under her ownership and possession at that time. It was also revealed that Congress leader Milind Deora was in continuous touch with Rana Kapoor for the sale of the painting. Kapoor was later informed that the amount paid to Gandhis would be used for the treatment of Sonia Gandhi in New York. Furthermore, he was promised Padam Bhushan in exchange for purchasing the painting.
Letter of Priyanka Gandhi expressing gratitude to #RanaKapoor for buying painting for Rs 2 Crore. pic.twitter.com/BI440fLRDo
— Rahul Kaushik (@kaushkrahul) March 9, 2020
Notably, in 2011, it was announced by the Congress party that Sonia Gandhi had gone to New York for surgery. Details of her illness were never revealed. Since then, Sonia Gandhi has gone on several foreign trips for medical treatment.
What can happen now?
If it gets proven that the painting was, in fact, gifted to the Prime Minister’s office and not Rajiv Gandhi in his personal capacity, the Prime Minister’s Office can take it back and submit it in Toshakhana, where gifts received by the sitting and former PMs are kept. Additionally, ED and other government agencies can investigate the matter and may seek recovery of the funds from the Gandhi family.
In 2020, ED officials had said that Priyanka could be summoned for questioning over the sale of the MF Hussain painting of her father, the former PM Rajiv Gandhi, to the Yes Bank founder after the current summons of major debtors and industrialists are over. “The Rs 2 crore paid by Rana Kapoor to Priyanka Gandhi was received by him from the bank shortly before he gave it to her and thus becomes part of our investigation into the case. Both the buyer and the seller could attract action under Section 3 of the PMLA Act,” a senior official was quoted in the Indian Express report.
Section 3 of the PMLA says “Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with proceeds of crime and projecting it as untainted property shall be guilty of the offense of money laundering.”
