 "Former top bankers under scanner, SFIO widens Mallya probe")
Widening its probe into the financial irregularities at erstwhile Kingfisher Airlines, the Serious Fraud Investigation Office (SFIO) has started examining former chiefs of various banks, including public sector lenders, for having extended fresh loans allegedly without full due-diligence, amid ballooning losses at the Vijay Mallya-owned carrier.
The white-collar crimes probe agency is also looking at allegations of loans being extended on the basis of “inflated” valuation of brands and some other assets as also suspected fund diversions from the airline, whose founder and main promoter Vijay Mallya is already under the scanner of multiple agencies, including Central Bureau of Investigation and the Enforcement Directorate.
Sources said SFIO has widened investigations into the affairs of Kingfisher Airlines and is now focussing on the lenders as well as their top management personnel for the suspected lapses in the due diligence process before extending loans to the carrier.
The agency has examined some former heads of public sector banks which had extended loans to the airline at a time when the carrier's losses were on the rise, they added.
SFIO is also looking into the role of Grant Thornton LLP, which had valued the brand. Grant Thornton India LLP, in March, had said it stands by the brand valuation report of Kingfisher Airlines and was ready to provide all required information to appropriate authorities.
The Securities and Exchange Board of India is also looking into alleged cases of insider trading and violations of listing regulations and corporate governance norms, among other lapses.
The ED registered a money laundering case against Mallya and others based on a CBI FIR registered last year. The agency is also investigating the overall financial structure of Kingfisher Airlines and will look into any payment of kickbacks.
The CBI had booked Mallya, Director of Kingfisher Airlines, the company, former CFO A Raghunathan and unknown officials of IDBI Bank in its FIR alleging that the loan was sanctioned in violation of norms regarding credit limits.
When contacted, former heads of some public sector banks, on condition of anonymity, accepted having been approached by the agency but maintained it was more about seeking information about the loan disbursal and other technicalities.
They maintained that there were no lapses at the top management level and diverted the official queries to the respective banks.
According to the sources, SFIO, which comes under the Corporate Affairs Ministry, has issued summons to former top officials of more than ten banks.
A significant chunk of the loans were given between 2007 and 2010, while the carrier's net losses jumped to more than Rs 1,600 crore in 2008-09 period.
Queries sent to SFIO Director and Corporate Affairs Ministry remained unanswered.
Bogged down by huge losses and liabilities, including dues to the lenders, the carrier was grounded in late 2012.
The flamboyant Mallya, who has also been declared as a wilful defaulted, left the country in March this year amid lenders stepping up efforts to recover dues worth more than Rs 9,000 crore. As part of the probe, which has been going for more than three years, SFIO has already questioned Mallya and other officials of the now defunct airline.
Besides, SFIO is looking into the high valuation of over Rs 4,000 crore secured by the airline as part of its overall probe.
The agency is investigating whether such a high valuation was arrived at fraudulently to get more funds from banks and siphon off the additional money for purposes other than proposed investment in the airline.
The white-collar crimes probe agency is also looking at allegations of loans being extended on the basis of “inflated” valuation of brands and some other assets as also suspected fund diversions from the airline, whose founder and main promoter Vijay Mallya is already under the scanner of multiple agencies, including Central Bureau of Investigation and the Enforcement Directorate.
Sources said SFIO has widened investigations into the affairs of Kingfisher Airlines and is now focussing on the lenders as well as their top management personnel for the suspected lapses in the due diligence process before extending loans to the carrier.
The agency has examined some former heads of public sector banks which had extended loans to the airline at a time when the carrier's losses were on the rise, they added.
SFIO is also looking into the role of Grant Thornton LLP, which had valued the brand. Grant Thornton India LLP, in March, had said it stands by the brand valuation report of Kingfisher Airlines and was ready to provide all required information to appropriate authorities.
The Securities and Exchange Board of India is also looking into alleged cases of insider trading and violations of listing regulations and corporate governance norms, among other lapses.
The ED registered a money laundering case against Mallya and others based on a CBI FIR registered last year. The agency is also investigating the overall financial structure of Kingfisher Airlines and will look into any payment of kickbacks.
The CBI had booked Mallya, Director of Kingfisher Airlines, the company, former CFO A Raghunathan and unknown officials of IDBI Bank in its FIR alleging that the loan was sanctioned in violation of norms regarding credit limits.
When contacted, former heads of some public sector banks, on condition of anonymity, accepted having been approached by the agency but maintained it was more about seeking information about the loan disbursal and other technicalities.
They maintained that there were no lapses at the top management level and diverted the official queries to the respective banks.
According to the sources, SFIO, which comes under the Corporate Affairs Ministry, has issued summons to former top officials of more than ten banks.
A significant chunk of the loans were given between 2007 and 2010, while the carrier's net losses jumped to more than Rs 1,600 crore in 2008-09 period.
Queries sent to SFIO Director and Corporate Affairs Ministry remained unanswered.
Bogged down by huge losses and liabilities, including dues to the lenders, the carrier was grounded in late 2012.
The flamboyant Mallya, who has also been declared as a wilful defaulted, left the country in March this year amid lenders stepping up efforts to recover dues worth more than Rs 9,000 crore. As part of the probe, which has been going for more than three years, SFIO has already questioned Mallya and other officials of the now defunct airline.
Besides, SFIO is looking into the high valuation of over Rs 4,000 crore secured by the airline as part of its overall probe.
The agency is investigating whether such a high valuation was arrived at fraudulently to get more funds from banks and siphon off the additional money for purposes other than proposed investment in the airline.