Expanding the ambit of the IDBI loan case against beleaguered businessman Vijay Mallya, the CBI has decided to probe all the transactions and loans taken by his firms totaling Rs7,000 crore since 2004. The agency will soon question the top officials of the PSU banks who are yet to come forward with complaints against Mallya.
Even as the CBI is trying to get to the bottom of widespread irregularities in the grant of loan to Mallya, Finance Minsiter Arun Jaitley on Thursday said that the banks will recover every penny of loan given to him and investigative agencies will take strong action against the liquor baron wherever he is found to have violated the law.
“... His (Mallya’s) facts are very clear. Every Government agency, whether its taxation department or investigative agency, wherever he has violated law, is going to take strong action. As far as banks are concerned, they are going to recover every penny of the rupee that they can from him,” Jaitley said.
The Minister was answering questions at India Today Conclave on what the Government was doing to recover money from Mallya, who is currently in the UK.
He also said the Government has been trying to address the problem of NPAs in sectors like steel, textile, highways and infrastructure, which are on account of economic slowdown.
“NPAs due to sectoral slowdown would cease to be NPAs once there is an upturn,” he added.
However, Jaitley said, the real source of worry was the cases involving “misconduct” on the part of individuals.
“There is a second category where large amounts of loans have been given in individual cases and some of the people misconducted themselves, there may not be adequate sureties and that’s a source of worry... This is the one, which is real cause of worry because there are moral and ethical issues without legal liability
Meanwhile, the probe so far against Mallya has revealed that out of the five lakh transactions made by his companies, 60 per cent of them involved fund outflow abroad. Officials also lamented that Mallya is yet to be declared a fraud by the banks, agency sources said, adding the agency is investigating the issue from the angle of cheating. The FIR registered had applied only sections relating to criminal conspiracy and criminal breach of trust besides relevant provisions of the Prevention of Corruption Act.
The probe has revealed that Mallya allegedly created a web of transactions trail in multiple countries. The agency has already written to Indian missions in four countries to seek information through diplomatic channels on the leads gathered so far, the sources said.
Official sources said the probe has been scaled up to do justice to the ongoing probe in the IDBI loan fraud case as all the transactions by Mallya’s firms are interconnected. While the loan to Mallya’s firms from a consortium of 17 banks was Rs 7,000 crore, the actual loss could be more as the companies enjoyed overdraft and credit limit and the same has to be ascertained during the probe, the sources said.
The sources said the IDBI bank loan fraud case was the trigger for investigating the goings on in other banks that extended loans to Mallya. IDBI bank case was closer to fraudulent activity as it was the last to extend loan to his firms and that too at a time when the companies visibly unhealthy in terms of financial status.
The CBI had written twice to IDBI, once in 2012 and later on in 2014 but the bank did not come up with a complaint after which the agency decided to register a case suo moto as an informatory complaint revealed prima facie irregularities. In early 2016, the agency also wrote to United Bank of India but the bank is yet to come forward with a complaint.
Compliant from a bank is necessary to register an FIR as a Union Finance Ministry circular suggests drafting of such complaints in a certain format. It is the banks’ prerogative to take decision and declare whether they were cheated or not.
The sources said while the banks are cooperating with the ongoing probe but are yet to commit on the alleged fraud committed by Mallya’s firms and not coming up with formal complaints.
Meanwhile, the agency has detained chartered accountant Bharat Bomb and his associate Shankar Khandelwal in the Rs 1,000 crore Syndicate Bank fraud case. While Bomb is being questioned at the agency headquarters here, Khandelwal is being questioned Jaipur. Two branches of the Bank in Jaipur and another one in Udaipur in connivance with the accused persons defrauded the bank to the tune of Rs 1,000 crore issuing credit limits in a fraudulent manner. Almost all the officials and employees of these branches were involved in the fraud, the sources said.