Eow Issues Loc Against Sudhir Valia In 1 000 Cr Yes Bank Linked Fraud Case

MUMBAI: The Economic Offences Wing (EOW) of the Mumbai police has issued a Look Out Circular (LOC) against businessman Sudhir Valia, a director of Suraksha Asset Reconstruction Ltd (Suraksha ARC), in connection with the alleged ₹1,000-crore loan fraud case that also names former Yes Bank managing director and chief executive Rana Kapoor.

The development comes days after the sessions court rejected Valia’s anticipatory bail plea, paving the way for the investigating agency to intensify its probe. The EOW has maintained that Valia’s custodial interrogation is necessary to unravel the larger conspiracy, trace the alleged diversion of funds and identify the beneficiaries of the transactions under investigation.

Valia has since approached the Bombay High Court challenging the LOC. His petition is scheduled to come up for hearing before a division bench of justices Sarang Kotwal and Ashish Chavan on July 1.

The case relates to loans worth more than ₹1,000 crore sanctioned by Yes Bank between 2017 and 2019 to companies associated with the Suraksha Group. According to the EOW, the borrowers, in conspiracy with Kapoor and others, secured the loans by submitting forged documents, concealing material information and misrepresenting the financial position of the borrowing entities to induce the bank to sanction the facilities.

Investigators have alleged that a substantial portion of the loan proceeds was subsequently diverted to entities and purposes unrelated to those for which the loans had been sanctioned, resulting in wrongful loss to Yes Bank and corresponding wrongful gain to the accused. The agency has claimed that the transactions formed part of a pre-planned conspiracy to siphon funds through a web of interconnected entities.

While rejecting Valia’s anticipatory bail plea earlier this month, the sessions court observed that the allegations disclosed a serious economic offence involving complex financial transactions and that the investigation was still at a crucial stage.

The court held that custodial interrogation was essential to trace the money trail, ascertain the role played by each accused, identify the ultimate beneficiaries of the alleged diversion of funds and recover material relevant to the investigation. It also observed that granting pre-arrest protection at this stage could impede the probe.

Valia has denied the allegations, contending that the prosecution case rests entirely on documentary evidence already in the EOW’s possession and that his custodial interrogation is unwarranted. He has maintained that he has cooperated with the investigation and that no case is made out for coercive action against him.