IANS
New Delhi/Bengaluru/Panaji
The Central Bureau of Investigation yesterday carried out raids at the homes and offices of liquor baron Vijay Mallya and his now grounded Kingfisher Airlines in connection with over Rs9bn loan by the IDBI bank which has now been declared a non-performing asset (NPA).
The raids were conducted at five places - at the offices of Kingfisher Airlines and at the homes of Mallya and others in Bengaluru, Mumbai and near Panaji, CBI officials said.
“The raids are still going on at five places of Mallya’s offices and residences in Mumbai, Bengaluru and in Goa in a case of allegedly violating banking norms in sanction and disbursement of Rs900 crore to Kingfisher Airlines,” a CBI spokesperson said in New Delhi.
In Goa, a CBI team from Mumbai raided the Kingfisher Villa, Mallya’s expansive property in the tony Candolim beach area, located 15km from Panaji.
The agency had registered the case against Mallya, Kingfisher Airlines chief finance officer A Raghunathan and unknown officials of the IDBI for allegedly violating banking norms in sanctions and disbursement of credit limit of over Rs9bn.
The loan was advanced by the bank despite uncertainty about earlier loans extended by a consortium of banks to the airline. Some of the banks in the consortium have already declared Mallya a “willful defaulter.”
But Mallya’s lawyers managed to convince the Calcutta High Court in December that the process of declaring him so was faulty.
In the last annual general meeting of UBI held in June this year, its managing director and CEO P Srinivas said: “We are fighting a legal battle against them beyond the consortium and we have already declared their corporate guarantor as willful defaulter.”
The Reserve Bank of India (RBI) extended the ambit of the term “wilful” defaulter to include not only the primary defaulting entity, but also the guarantors of its loans, and individuals on the boards of companies declared to be in wilful default.
Sources said what raised suspicion was the fact that it was the first exposure of the Kingfisher to the bank and the big loan was granted despite negative rating and net worth of the airline.
While registering the preliminary inquiry in 2014 into the questionable sanction of the loan by IDBI, the CBI had said: “There was no need for the bank to take the exposure outside the consortium when already other banks loans were getting stressed.”
Mallya’s airline has been grounded since October 2012.
A string of Indian banks has an exposure of nearly Rs70bn in loans to the airline, with the State Bank of India leading with Rs16bn. The Punjab National Bank, Bank of India and Bank of Baroda have loan exposures in the range of Rs8bn, Rs6.5bn and Rs5.5bn.
