SFIO widens Mallya probe; former top bankers under scanner

The agency has examined some former heads of public sector banks which had extended loans to the airline at a time when the carrier's losses were on the rise.

PTI August 29, 2016 08:15:09 IST
SFIO widens Mallya probe; former top bankers under scanner

New Delhi: Widening its probe into the financial irregularities at erstwhile Kingfisher Airlines, SFIO has started examining former chiefs of various banks, including public sector lenders, for having extended fresh loans allegedly without full due-diligence amid ballooning losses at the Vijay Mallya-owned carrier.

The white-collar crimes probe agency is also looking at allegations of loans being extended on the basis of "inflated" valuation of brands and some other assets as also suspected fund diversions from the airline, whose founder and main promoter Vijay Mallya is already under scanner of multiple agencies, including the CBI and the Enforcement Directorate.

SFIO widens Mallya probe former top bankers under scanner

Vijay Mallya. AFP

Sources said SFIO has widened investigations into the affairs of Kingfisher Airlines and is now focussing on the lenders as well as their top management personnel for the suspected lapses in the due diligence process before extending loans to the carrier.

The agency has examined some former heads of public sector banks which had extended loans to the airline at a time when the carrier's losses were on the rise, they added.

When contacted, former heads of some public sector banks, on condition of anonymity, accepted having been approached by the agency but maintained it was more about seeking information about the loan disbursal and other technicalities. They maintained that there were no lapses at the top management level and diverted the official queries to the respective banks.

According to the sources, SFIO, which comes under the Corporate Affairs Ministry, has issued summons to former top
officials of more than ten banks.

A significant chunk of the loans were given between 2007 and 2010, while the carrier's net losses jumped to more than Rs 1,600 crore in 2008-09 period.

Queries sent to SFIO Director and Corporate Affairs Ministry remained unanswered.

Bogged down by huge losses and liabilities, including dues to the lenders, the carrier was grounded in late 2012. The flamboyant Mallya, who has also been declared as a wilful defaulted, left the country in March this year amid lenders stepping up efforts to recover dues worth more than Rs 9,000 crore.

As part of the probe, which has been going for more than three years, SFIO has already questioned Mallya and other
officials of the now defunct airline.

Besides, the Serious Fraud Investigation Office (SFIO) is looking into the high valuation of over Rs 4,000 crore secured by the airline as part of its overall probe.

The agency is investigating whether such a high valuation was arrived at fraudulently to get more funds from banks and siphon off the additional money for purposes other than proposed investment in the airline.

In this regard, SFIO is also looking into the role of Grant Thornton LLP, which had valued the brand. Grant Thornton India LLP, in March, had said it stands by the brand valuation report of Kingfisher Airlines and was ready to provide all required information to appropriate authorities.

Sebi is also looking into alleged cases of insider trading and violations of listing regulations and corporate governance norms, among other lapses.

The ED registered a money laundering case against Mallya and others based on a CBI FIR registered last year. The agency is also investigating the overall financial structure of Kingfisher Airlines and will look into any payment of kickbacks.

The CBI had booked Mallya, Director of Kingfisher Airlines, the company, former CFO A Raghunathan and unknown officials of IDBI Bank in its FIR alleging that the loan was sanctioned in violation of norms regarding credit limits.

Updated Date:

also read

National Herald case: Rahul Gandhi questioned by ED for fourth day, Congress holds protest at Jantar Mantar
India

National Herald case: Rahul Gandhi questioned by ED for fourth day, Congress holds protest at Jantar Mantar

For three consecutive days from 13 to 15 June, Rahul Gandhi was questioned by the ED for about 30 hours. He was questioned over multiple sessions and his statements were recorded under the Prevention of Money Laundering Act (PMLA)

As India’s biggest bank fraud is unearthed, a look at the DHFL case and other big bank frauds in the country
Business

As India’s biggest bank fraud is unearthed, a look at the DHFL case and other big bank frauds in the country

Former promoters of Dewan Housing Finance Ltd (DHFL) are among 13 accused who have been arrested for defrauding a consortium of 17 banks of Rs 34,615 crore

'Super friendship since I recruited him for RCB': Vijay Mallya shares photo with Chris Gayle
First Cricket News

'Super friendship since I recruited him for RCB': Vijay Mallya shares photo with Chris Gayle

Chris Gayle has scored a total of 4965 runs in 142 appearances at an outstanding 145-plus strike rate.