The scam-tainted family of former Union Finance Minister P Chidambaram suffered yet another setback late Friday evening when the Central Bureau of Investigation filed a charge sheet in a Chennai court against AC Muthaiah, a close relation of Chidambaram, on various charges including cheating and financial misdeeds.
AC Muthaiah, the scion of the Chettinadu family, is a leading industrialist and former boss of the Board of Control for Cricket in India (BCCI). According to the charge sheet filed by the CBI in the Additional Chief Metropolitan Magistrate Court in Chennai, Muthaiah, who was the then chairman of the First leasing Company of India ltd, (a high profile non banking financial company), Farouk M Irani, the then managing director of the company and 23 others caused loss of Rs 102.87 crore to the public sector Syndicate Bank . All of them have been charged under sections of 120 B of the Indian Penal Code read with 201, 409, 420, 468, 471 and 477A of the IPC.
According to a release issued by the CBI, the charge sheet has been filed following a complaint by the Syndicate Bank. The company in question, the First leasing Company of India, Chennai, was banking with the Corporate Finance Branch of the Syndicate Bank at Chennai since 2004.
The CBI release states that the accounting date base maintained was in oracle which allowed the said company to manipulate it through the back end process. The complaint further states that the company had been showing inflated income and assets over the years since 1998 by showing fictitious income and non-existing assets.
Most of the loans shown as granted by the company to their clients were allegedly fictitious. loans availed from the banks were allegedly diverted to the shell companies controlled by the then managing director to acquire the shares of the said Company only. It was also alleged that the NPAs he said company were shown to be taken over by these shell companies through bogus agreements to avoid NPA provisions resulting in inflated profits thereby causing loss of Rs 102.87 crore to Syndicate Bank
Sources in Syndicate Bank said that the looting of the Bank by Muthaiah and his team was at its peak during the tenure of P Chidambaram as the Union Minister in the UPA 1 and 2 Governments (2004 to 2014). The Bank’s complaint was filed in 2016 following detection of the swindling by investigation agencies.
“Investigation revealed that the said accused persons along with 7 satellite/ shell companies in furtherance of a conspiracy with statutory and internal auditors had allegedly cheated the bank by submitting forged financial statements to obtain undue credit limits and siphoned the same away for extraneous uses whilst causing wrongful loss of Rs 102.87 crores (approx.) to the bank.
The investigation has also disclosed that the Promoter-Directors had allegedly misappropriated the assets of the company entrusted to them by using such loaned money to donate annually to a Trust run by the said accused,” said the CBI release that was issued after the filing of the charge sheet.