IDBI bank gave Vijay Mallya Rs 900 cr despite KFA’s low credit ratings
CBI’s probe into alleged irregularities related to the sanction of loans worth Rs 900 crore by IDBI Bank to Vijay Mallya’s Kingfisher Airlines revealed the approvals came during October–November 2009, despite the borrower’s inadequate credit ratings.business Updated: Mar 11, 2016 01:02 IST
The Central Bureau of Investigation’s (CBI’s) probe into the alleged irregularities related to the sanction of loans worth Rs 900 crore by IDBI Bank to Vijay Mallya’s Kingfisher Airlines (KFA) revealed that the approvals came during October–November 2009, despite the borrower’s ineligibility and inadequate credit ratings.
The sanction of around 36% of the total loan amount, around Rs 350 crore, was approved by bank officials led by the then CMD Yogesh Agarwal, despite the fact that at that time KFA’s “credit ratings were not available,” according to CBI’s probe documents accessed by HT.
“This was a huge lapse by the bank authorities. We have examined two then CMDs and a group head (corporate banking) as part of our probe,” a CBI source said.
Later, on November 19, 2009, the bank’s credit committee sanctioned the remaining amount.
The probe document revealed that despite eligibility-related “deficiencies”, including “negative financials, negative networth and not satisfying the norms stipulated in the bank’s corporate loan policy,” the loan request was sanctioned against “security” such as “Mallya’s personal guarantee”, “hypothecation/assignment of” KFA’s “brand” and “corporate guarantee” of the UB Group.
The UB Group has denied any wrongdoing so far.
Meanwhile, the CBI clarified on Thursday that it had issued a Look Out Circular (LOC) against Mallya in October but its mandate was not to prevent him from leaving the country. Government sources, however, said the LOC was changed in late November. When asked about the alleged changes in the LOC, a CBI spokesperson said: “I am not aware of this but we will examine if it was done and why. Mallya was thrice questioned by us.”
First Published: Mar 10, 2016 23:42 IST