The Central Bureau of Investigation filed a chargesheet and arrested eight former officials of IDBI Bank and Kingfisher Airlines earlier this week, including former CMD of IDBI Bank Yogesh Aggarwal in the loan default case related to Vijay Mallya. The liquor baron, who was named as an absconder, was chargesheeted as well. But what exactly was the role of the former IDBI top boss and how according to CBI rules were flouted to grant a 1,000-crore loan to Kingfisher.
CBI sources say that Reserve Bank of India or RBI guidelines were ignored and the loan was granted to Mr Mallya in three tranches, despite Kingfisher’s weak financial position and low credit rating.
According to sources in the CBI, Kingfisher applied for a corporate loan of Rs. 750 crore to IDBI on October 1, 2009. Even as this application was pending, Mr Mallya met with the then IDBI chairman Yogesh Agarwal on October 6, seeking a short term loan of Rs. 150 crore. On the very next day, Kingfisher officially filed for this loan and it was sanctioned immediately.
Again on November 4, Kingfisher applied for another short term loan to IDBI, which was, once again, granted the same day. Kingfisher Chief Financial Officer Raghu Nathan wrote to IDBI mentioning a meeting between Mr Mallya and Mr Aggarwal, which led to this loan being sanctioned the same day.
The credit committee of IDBI was to meet to consider Kingfisher’s corporate loan application later that month. For that Kingfisher had to pledge its unencumbered shares, a mandatory condition to get the loan.
But the CBI says on November 10, Mr Mallya mailed Kingfisher CFO Raghu Nathan telling him there was no need to pledge the shares because he had already discussed this with the IDBI CMD and that was the ‘accepted position’.
The IDBI credit committee had a meeting on this on the 24th of the month and Mr Aggarwal allegedly approved the minutes, accepting Mr Mallya’s condition.
CBI sources also claim that 263 crores, which was a part of the loan, has been diverted out of the country and used to pay up previous loans of Kingfisher.
Despite repeated attempts, lawyers of the arrested former IDBI officials have not responded to NDTV’s request for comment on these allegations.
Vijay Mallya has been out of the country since last April, ever since multiple probes were initiated against him for defaulting on loans worth 9,000 crores, taken from several banks. Mr Mallya, presently in United Kingdom, was questioned by the CBI in the early stages of investigation, But he has not appeared in front of either the CBI or the Enforcement Directorate ever since despite a non-bailable warrant against him.
Mr Mallya in tweets on Friday claimed that the money was not misused and that he had submitted documentary evidence with the CBI.
He has said he is being subjected to a ‘witch hunt’. “Till this minute there is no final judicial determination on what KFA owes to Banks and what I may owe in my personal capacity after trial. Yet it is reported that I have fled or run away owing money to banks that I never ever borrowed in the first place,” Mr Mallya said.