The Central Bureau of Investigation made several arrests across the country on Wednesday that could blow the lid off a multi-crore scam involving housing loans being given for kickbacks.
The Economic Offences Wing (EOW) of the CBI swooped down on the offices of Life Insurance Corporation (LIC), LIC Housing Finance, Money Matters, a firm that provides financial services to corporates, and three national banks and arrested eight of their top officials.
The arrests were made after the CBI found that housing loans worth crores of rupees were provided to various corporates after taking favours in return and Money Matters was acting as the go-between.
The officials are accused of even blocking loans of applicants who refused to oblige them.
Though the CBI has refused to name the companies that benefited, a copy of the agency's report submitted in court includes big names - Lavasa Corp, DB Realty, Mantari Realty, Adani, JP Hydro, JSW Power and Pantaloon.
Those arrested include LIC secretary (investment) Naresh K Chopra, LIC Housing Finance director and CEO Ramchandran Nair, Central Bank of India director Maindersingh Johar, Bank of India general manager RN Tayal and Money Matters CMD Rajesh Sharma. A Lavasa spokesperson said the company had a "fee-based arrangement" with Money Matters for selling their properties, for which it paid 1-2% as fee and that its "dealings were strictly professional".
CBI has alleged that Money Matters facilitated loans for their favoured companies and blocked the applications of others.
LIC said all guidelines have been followed in giving loans. The government played the issue down. "It's an individual case of bribery," minister of state for finance Namo Narain Meena said. "There is no large-scale scam. The banking system is sound."
The CBI said Money Matters officials also allegedly collected confidential business information from financial institutions. Searches took place in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar as well.