New Delhi, Jan 28: Several shocking details have emerged about how rules were being flouted by IDBI Bank officials to grant loans to the now defunct Kingfisher Airlines. The case is currently being investigated by the Central Bureau of Investigation. Recently, the CBI has filed a chargesheet and arrested eight former officials of IDBI Bank and Kingfisher.
Sanjay Trassy, an assistant general manager at IDBI Bank, said in his statement that a low rating was given to Kingfisher which ensured a low credit marking in the loan sector. Despite the company's financial position being unsatisfactory, the bank had disbursed a corporate loan of Rs 750 crore in 2009.
A report filed by Trassy was considered at a meeting of the risk rating committee which was held on November 16, 2009. The chargesheet states that a detailed reasoning and rationale for upgrading the rating from B to BB and improving the score from 45 to 50 was not recorded in the minutes of the meeting.
The chargesheet adds that just a month before Kingfisher approached IDBI Bank for a loan of Rs 950 crore in October 2009, two UB Group of companies, owned by Mallya, had settled outstanding dues and obtained 'no dues' certificates from the bank.
The chargesheet states that the UB Group's associate concerns, WIE Engineering and United Breweries Limited, had defaulted against the credit facilities from IDBI Bank in the past. Just before Kingfisher approached the bank for a corporate loan of Rs 950 crore, both these group companies settled the matters by way of one time settlement.
"The bank issued no dues certificate to the borrower in October 2009, prior to the sanction of fresh loans of Rs 150 crore, Rs 200 crore and Rs 750 crore," the CBI chargesheet revealed.
First, a short term loan of Rs 150 crore was granted to Kingfisher in 2009. The group of companies repaid Rs 100 crore. The second loan was of Rs 750 crore. Out of this, Rs 81 crore was given back by Kingfisher to the Airport Authority of India, Rs 10 crore to oil companies and Rs 17 crore to catering.
The CBI adds that Rs 50 crore went towards income tax payments, Rs 55 crore to settle the documentary bill discounted by Bank of Baroda and Rs 86 crore to Axis Bank for local payments.
It was also found that Rs 21 crore was used towards interest payments for earlier loans and Rs 290 crore for foreign remittances. An amount of Rs 3.45 crore was deposited in a bank account owned by Kingfisher in London.
The CBI says that an amount of Rs 422 crore had gone to offshore accounts. This was mainly for leasing companies. Now, the CBI is trying to find out if these leasing companies are genuine in nature or not. We are ascertaining this information, CBI officials informed. The CBI sleuths added that an amount of Rs 262 crore was diverted by the company for personal use.