<p> Finance Minister Pranab Mukherjee and top officials of the Department of Financial Services (DFS) under the Finance Ministry held an emergency meeting in the national capital to take stock of the situation arising out of the housing loan scam, the latest in a series of scandals that has rocked the UPA government struggling to put up a clean image. <br /><br />The worms of the housing scam came into the open on Wednesday as the country’s premier probe agency arrested the chief of LIC Housing Finance and several other officials of some public sector banks, including Bank of India, Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance Ltd. They allegedly received kickbacks from a private financial services company ‘Money Matters’ for advancing illegal loans. <br /><br />After the CBI raided several places across the country and seized documents that could point to the arrested officials’ involvement with the realty developer, the Finance Ministry had tried to play down the scale and magnitude of the scam.<br /><br />In Mumbai, LIC chairman T S Vijayan asserted that there was no systemic failure in the company and their “asset quality has not been impaired" consequent to the housing loan scam involving some of its top officials. <br /><br />“We will keep on doing internal inquiry and address internal risk management system off and on. It is a continuous process,” he told the media after an emergency board meeting, in which it appointed senior-most General Manager Chandrasekhar as the officiating CEO of LIC Housing Finance.<br /><br />Mukherjee, while sending out a strong signal that officials found guilty would be punished in accordance with the law, directed the implicated public sector lenders and insurers to look into their exposures to various companies mentioned in the CBI’s application filed in court in connection with housing finance racket. <br /><br />The minister asked the board of directors of the lenders to carry out fresh assessments of their non-performing assets.<br /><br />Specifically, Mukherjee instructed the banks and financial institutions to take “appropriate action against these individuals as per established procedure.” He directed that they should ensure that all procedures and due diligence consistent with board-approved guidelines had been adhered to while approving the loans by the competent authority. <br /><br />As a precautionary measure to prevent recurrence of such malfeasance in the future, he directed that the DFS, regulatory authorities and institutions should take immediate action to review and strengthen the procedures in connection with sanctioning of loans.<br /><br />Taking the cue from Mukherjee’s tough message on prevention of recurrence of such scams, the I-T Department decided to start its own probe into the alleged financial irregularities. It will go into all financial transactions of the arrested officials of both public and private sector institutions as well as the financial firms involved in the racket, sources said.<br /><br />The CBI sought explanation from private companies who benefited from the alleged cross-country racket. “Soon after the arrest of the officials, we served notices to all the beneficiary companies under Section 91 of Criminal Procedure Code to explain their stand in the case,” a senior CBI official said. <br /><br />D B Realty, Adani and a few other companies have already sent their representatives with relevant documents, the official said. The beneficiary firms include M/S Lavasa, Pashmina Ltd, Mantri Realty, Sigrun Ltd, Entertainment World, Indore City Treasures, Ashapura Minechem, BGR Energy, OPG Group, Adani, J P Hydro, J S W Power, Ralligear, Pantaloon, Adalite and MTECH.</p>
<p> Finance Minister Pranab Mukherjee and top officials of the Department of Financial Services (DFS) under the Finance Ministry held an emergency meeting in the national capital to take stock of the situation arising out of the housing loan scam, the latest in a series of scandals that has rocked the UPA government struggling to put up a clean image. <br /><br />The worms of the housing scam came into the open on Wednesday as the country’s premier probe agency arrested the chief of LIC Housing Finance and several other officials of some public sector banks, including Bank of India, Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance Ltd. They allegedly received kickbacks from a private financial services company ‘Money Matters’ for advancing illegal loans. <br /><br />After the CBI raided several places across the country and seized documents that could point to the arrested officials’ involvement with the realty developer, the Finance Ministry had tried to play down the scale and magnitude of the scam.<br /><br />In Mumbai, LIC chairman T S Vijayan asserted that there was no systemic failure in the company and their “asset quality has not been impaired" consequent to the housing loan scam involving some of its top officials. <br /><br />“We will keep on doing internal inquiry and address internal risk management system off and on. It is a continuous process,” he told the media after an emergency board meeting, in which it appointed senior-most General Manager Chandrasekhar as the officiating CEO of LIC Housing Finance.<br /><br />Mukherjee, while sending out a strong signal that officials found guilty would be punished in accordance with the law, directed the implicated public sector lenders and insurers to look into their exposures to various companies mentioned in the CBI’s application filed in court in connection with housing finance racket. <br /><br />The minister asked the board of directors of the lenders to carry out fresh assessments of their non-performing assets.<br /><br />Specifically, Mukherjee instructed the banks and financial institutions to take “appropriate action against these individuals as per established procedure.” He directed that they should ensure that all procedures and due diligence consistent with board-approved guidelines had been adhered to while approving the loans by the competent authority. <br /><br />As a precautionary measure to prevent recurrence of such malfeasance in the future, he directed that the DFS, regulatory authorities and institutions should take immediate action to review and strengthen the procedures in connection with sanctioning of loans.<br /><br />Taking the cue from Mukherjee’s tough message on prevention of recurrence of such scams, the I-T Department decided to start its own probe into the alleged financial irregularities. It will go into all financial transactions of the arrested officials of both public and private sector institutions as well as the financial firms involved in the racket, sources said.<br /><br />The CBI sought explanation from private companies who benefited from the alleged cross-country racket. “Soon after the arrest of the officials, we served notices to all the beneficiary companies under Section 91 of Criminal Procedure Code to explain their stand in the case,” a senior CBI official said. <br /><br />D B Realty, Adani and a few other companies have already sent their representatives with relevant documents, the official said. The beneficiary firms include M/S Lavasa, Pashmina Ltd, Mantri Realty, Sigrun Ltd, Entertainment World, Indore City Treasures, Ashapura Minechem, BGR Energy, OPG Group, Adani, J P Hydro, J S W Power, Ralligear, Pantaloon, Adalite and MTECH.</p>
