The Central Bureau of Investigation (CBI) is investigating if the real estate companies, found to be taking loans after paying bribes to top bank and Life Insurance Corporation of India (LIC) officers, were buying land using this money.
The CBI has found that there was a chain in loan-taking pattern by builders.
“They kept on taking excess loan on projects and diverted part of the money to buy land for future projects,” a CBI officer said requesting anonymity.
“They used this technique to increase their company’s asset value and net worth,” the officer said, adding that this helped them in enhancing their position in the market.
The CBI found that the excess loan amount was diverted in the stock market as well.
The income tax (I-T) department will also investigate if the builders were inflating land costs in their records to evade tax.
“The land purchased in the past at a lower value, is shown as acquired at a later stage on increased cost,” a senior I-T officer said, adding that this helped them in showing ‘increased’ expenditure in account books, which was used to reduce profit (in account books) and which further helped them in evading taxes. The
I-T department will coordinate with the CBI in the probe.
Property lawyer, Vinod Sampat, confirmed that builders created land banks using loan money. This is done with the consent of the government officers concerned who overlook internal checks that are required to pass the loans.
The CBI had arrested Naresh K Chopra, secretary (investment) LIC, Mumbai, Ramchandran Nair, director and CEO, LIC Housing Finance, Mumbai, RN Tayal, GM, Bank of India, Chennai, Manindersingh Johar, director, Central Bank of India, New Delhi, Venkoba Gujjal, deputy general manager, Punjab National Bank, Mumbai, Rajesh Sharma, CMD, Money Matters, Mumbai, and Suresh Gattani and Sanjay Sharma from Money Matters, Mumbai.
Real estate and other firms were getting excess loans with the help of Money Matters, a financial services firm, which was the link between them (the firms), the bank and LIC officers. The bribe for clearing loans was also paid through Money Matters.