The financial institution had red-flagged the account to the Reserve Bank of India (RBI) after the Thapar group firm defaulted on a mortgage that it had obtained from the financial institution when Rana Kapoor was helming its affairs.
Lenders sometimes ‘red-flag’ an account after they consider the borrower has defaulted on a mortgage attributable to some suspicious exercise corresponding to misuse of the funds.
Yes Bank had offered an unsecured mortgage of Rs 500 crore to Avantha Holdings. To safe its publicity, it offered further loans to the corporate between 2017 and 2019 and took shares of CG Power as collateral to safe all the mortgage quantity.
Yes Bank and Avantha Holdings had not responded to ET’s queries as of press time.
State Bank of India had invested Rs 7,250 crore in Yes Bank in March 2020 as a part of a government-backed rescue plan. It is the most important shareholder of the financial institution now after Kapoor was eased out and investigations had been launched in opposition to him.
Avantha Holdings can also be the corporate that was on the centre of loans from KKR India Financial Services. The firm had taken 5 loans from KKR’s debt arm. Four of these had been absolutely paid off. However, one of many loans, which was secured in opposition to Thapar’s shares in CG Power, turned dangerous. The US personal fairness agency invoked the shares that it had held as safety. It additionally allegedly orchestrated Thapar’s elimination from the board of CG Power. Thapar has contested his elimination on the National Company Law Tribunal.
Avantha Holdings is the car that Thapar used for financing the group’s growth into thermal energy technology. Most of the loans raised by the holding firm had been supposed for utilisation in the direction of capex necessities of the ability vegetation.