<p>Former IDBI chairman Yogesh Aggarwal and seven others were arrested on Monday by the CBI in connection with the sanctioning of around Rs 900 crore to Vijay Mallya’s now-defunct Kingfisher Airlines.<br /><br /></p>.<p>Four people involved with Kingfisher Airlines, including former chief financial officer <br />A Raghunathan, and three former executives of IDBI Bank were also nabbed following investigations into the loan default case involving Mallya, who had fled India in March last year for the UK.<br /><br />According to the CBI FIR filed in July 2015, officials of IDBI colluded with the promoters/directors and the then chief financial officer (CFO) of Kingfisher Airlines to sanction credit limits in violation of banking norms, thereby causing loss to the bank by “such a fraudulent” act. It came to light during investigations by the CBI and the Enforcement Directorate that the loan was sanctioned against a collateral security of the Kingfisher Brand, corporate guarantee of United Breweries and personal guarantee of Mallya. Around Rs 807 crore of the loan remained unpaid.<br /><br />According to investigators, the IDBI loan was disbursed to Kingfisher Airlines “despite weak financials, negative net-worth and low credit rating of the borrower company”.<br /> <br />Also, they said, the company did not satisfy the norms stipulated in the corporate loan policy of the bank. Sources said the loan was also sanctioned in “extraordinary haste” without verification of the quality and value of the security independently. <br /><br />The arrests came on a day a CBI team conducted searches at 11 places, including Mallya’s Bengaluru residence, three floors of UB Towers in Bengaluru, and residences of Aggarwal and Raghunathan. “A CBI team visited the UB Group offices in Bengaluru today (Monday) and we are fully cooperating with them,” a UB spokesperson said.<br /><br />The CBI has two cases registered against Mallya and others on loan default, including one by SBI that the accused had sought a recast of his loan repayment in which certain information was “suppressed”.<br /><br />Only last Thursday, Bengaluru Debt Recovery Tribunal had ordered the SBI-led consortium of banks to start the process of recovering Rs 6,203 crore at an annual interest rate of 11.5%.<br /><br />The IDBI case came to light after the CBI arrested Syndicate Bank Chairman and Managing Director S K Jain in 2014 on charges of taking a bribe of Rs 50 lakh for increasing credit limit of some companies in violation of banking rules.<br />DH News Service<br /><br />Mallyanama<br />Bank officials colluded with airlines CFO to sanction loan in violation of norms<br />According to CBI and ED, amount was sanctioned despite weak financials<br />Company did not satisfy corporate loan policy stipulations<br />Loan was sanctioned in extraordinary haste</p>
<p>Former IDBI chairman Yogesh Aggarwal and seven others were arrested on Monday by the CBI in connection with the sanctioning of around Rs 900 crore to Vijay Mallya’s now-defunct Kingfisher Airlines.<br /><br /></p>.<p>Four people involved with Kingfisher Airlines, including former chief financial officer <br />A Raghunathan, and three former executives of IDBI Bank were also nabbed following investigations into the loan default case involving Mallya, who had fled India in March last year for the UK.<br /><br />According to the CBI FIR filed in July 2015, officials of IDBI colluded with the promoters/directors and the then chief financial officer (CFO) of Kingfisher Airlines to sanction credit limits in violation of banking norms, thereby causing loss to the bank by “such a fraudulent” act. It came to light during investigations by the CBI and the Enforcement Directorate that the loan was sanctioned against a collateral security of the Kingfisher Brand, corporate guarantee of United Breweries and personal guarantee of Mallya. Around Rs 807 crore of the loan remained unpaid.<br /><br />According to investigators, the IDBI loan was disbursed to Kingfisher Airlines “despite weak financials, negative net-worth and low credit rating of the borrower company”.<br /> <br />Also, they said, the company did not satisfy the norms stipulated in the corporate loan policy of the bank. Sources said the loan was also sanctioned in “extraordinary haste” without verification of the quality and value of the security independently. <br /><br />The arrests came on a day a CBI team conducted searches at 11 places, including Mallya’s Bengaluru residence, three floors of UB Towers in Bengaluru, and residences of Aggarwal and Raghunathan. “A CBI team visited the UB Group offices in Bengaluru today (Monday) and we are fully cooperating with them,” a UB spokesperson said.<br /><br />The CBI has two cases registered against Mallya and others on loan default, including one by SBI that the accused had sought a recast of his loan repayment in which certain information was “suppressed”.<br /><br />Only last Thursday, Bengaluru Debt Recovery Tribunal had ordered the SBI-led consortium of banks to start the process of recovering Rs 6,203 crore at an annual interest rate of 11.5%.<br /><br />The IDBI case came to light after the CBI arrested Syndicate Bank Chairman and Managing Director S K Jain in 2014 on charges of taking a bribe of Rs 50 lakh for increasing credit limit of some companies in violation of banking rules.<br />DH News Service<br /><br />Mallyanama<br />Bank officials colluded with airlines CFO to sanction loan in violation of norms<br />According to CBI and ED, amount was sanctioned despite weak financials<br />Company did not satisfy corporate loan policy stipulations<br />Loan was sanctioned in extraordinary haste</p>
