BackCBI searches Kingfisher, Vijay Mallya offices in loan probe
The searches were conducted at three places in Mumbai and one each in Bengaluru and Goa
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Mumbai: The Central Bureau of Investigation (CBI) raided the offices of Kingfisher Airlines Ltd and its owner Vijay Mallya as part of an investigation into the alleged default on a ₹ 900 crore loan from state lender IDBI Bank Ltd.
The CBI registered a case against Mallya, the now-defunct Kingfisher Airlines, chief financial officer A. Raghunathan and unknown officials of IDBI Bank, agency spokesperson Devpreet Singh said by phone on Saturday. IDBI employees are alleged to have cooperated with Mallya and Raghunathan, and sanctioned credit limits in “violation of banking norms," she said. The searches were conducted at three places in Mumbai and one each in Bengaluru and Goa, the agency said in a statement on Saturday.
Prime Minister Narendra Modi and Reserve Bank of India governor (RBI) Raghuram Rajan have adopted a tough-love approach to state banks, insisting on management discipline in return for a ₹ 20,000 crore asset injection this fiscal year. India had ₹ 3 trillion of non-performing loans, latest central bank data show.
“The intent of the government is clear that defaulters will be treated harshly," Paras Bothra, vice president of equity research at Ashika Stock Broking Ltd, said by phone in Mumbai on Sunday. “The banks are being burdened by huge bad loans and that prompted the government to act tough."
Liquor baron Mallya’s Kingfisher Airlines was grounded in 2012 amid mounting debt. The shares of the airline were suspended from trading in Mumbai in December 2014.
“The company co-operated with the officials and provided the necessary documents and will continue to offer co- operation," UB Group spokesman Sumanto Bhattacharya said in a text message on Saturday. UB Group is controlled by Mallya.
Two phone calls Sunday to the corporate office of IDBI Bank in Mumbai went unanswered.
“Several incriminating documents found during searches are being scrutinized," the CBI statement said. “Further investigation is in progress."
IDBI shares have gained 7.9% this year, compared with a 1.5% decline in the benchmark Sensex index. Bloomberg
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