ED enquires into Vijayan-Yes allegations

Mumbai: The Enforcement Directorate (ED) is enquiring into allegations that TS Vijayan, the former chairman of Insurance Regulatory Development Authority of India (IRDAI), may have improperly tipped off a Kerala government organisation about then private sector lender Yes Bank’s travails in January this year causing the state body to withdraw ₹250 crore from the bank.

Anurag Thakur, minister for state for finance, responding to a query raised in Rajya Sabha on Monday about the issue of financial transaction of ₹250 crore by Kerala Infrastructure Investment Board (KIIFB) with Yes Bank, said that ED is enquiring into it. Thakur in its response added that any disclosure at this stage can impact the inquiry process.

Months before the RBI imposed a withdrawal limit of ₹50,000 per depositor in Yes Bank, KIIFB withdrew all its funds worth ₹250 crore from the bank. TS Vijayan joined Yes Bank board in December 2018 and served till the board was superseded by the RBI in March 2020. Vijayan later joined the KIIFB in June 2020.

Documents reviewed by ET show that Vijayan’s induction into KIIFB started in July 2019 itself, though he was formally inducted only in June this year. KIIFB on July 23, 2019, sought the approval of the Government of India for Vijayan’s appointment.

KM Abraham, CEO of KIIFB denied Vijayan’s role in the Yes Bank transaction and said he was not even associated with KIIFB at that time. “KIIFB withdrew the amount according to the principles of our investment policy and the decision that we should exclude banks under the Prompt Corrective Action (PCA) Framework from our investors. We are not aware of any probe by the ED in this regard,” Abraham said in an email response.

An email query sent to Vijayan, the finance ministry and Yes Bank did not elicit any response till press time on Wednesday.

Last month, ET reported that Vijayan is under the scanner of the finance ministry for becoming a director in Yes Bank in 2018 without obtaining prior approval of the government. After issuing a show-cause notice to Vijayan, the ministry also appointed chief vigilance officer of United India Insurance, R Balasubramanian, as the inquiry officer in July to look into the allegations.

IRDAI chairman and members are prohibited from being appointed on the board of any private or government companies linked to the insurance sector for two years after they retire from the regulatory body.