Financial institutions Industrial Development Bank of India (IDBI) and Industrial Finance Corporation of India (IFCI) had extended loans of Rs 1,400-odd crore to companies known to be close to broker Ketan Parekh.
According to details furnished by the Reserve Bank of India to the Joint Parliamentary Committee (JPC), more than Rs 1,000 crore was advanced by IDBI to companies such as Global Telesystems (Rs 40 crore), Himachal Futuristic Communications Ltd (Rs 357.09 crore), SSI Ltd (Rs 71.75 crore), Satyam Computers (Rs 169.80 crore), Zee Telefilms (Rs 50 crore), Microwave Communication, an HFCL group company (Rs 20 crore) and HFCL Infotech (Rs 300 crore). All these loans were in the form of rupee loans.
The RBI has documented that in the case of HFCL, the disbursed amount at Rs 357.09 crore was higher than the sanctioned amount of Rs 253.15 crore. These advances were made after January 1999.
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The RBI, in its presentations to the JPC, said that it proposed to inspect the accounts of the FIs to assess their exposure to the capital market and check whether any of the loans disbursed by them went into the stock markets.
Further, ICICI had extended corporate loans of Rs 60 crore to group companies of Zee Telefilms against a pledge of equity shares by the companies.
It had also advanced loans of Rs 200 crore to group companies of Ranbaxy Laboratories, again against shares pledged by Ranbaxy and according to the RBI, these loans are still outstanding.
The FI had also extended a loan of Rs 200 crore to group companies of HCL Technologies in 1999 against shares pledged but this amount has been repaid, RBI noted.
IFCI also made advances to the tune of Rs 86 crore, but, according to the records, most of these disbursements were via loans sanctioned in 1996 and 1998, the RBI said.
The companies to which the loans were made include DSQ Industries, HFCL and HFCL Satellite Communications Ltd.
Both ICICI and IDBI had fairly large exposures to the equity market, according to the RBI. Between January 1, 1999 and June 28, 2001, ICICI invested Rs 444.65 crore in secondary market purchases of Global Telesystems, HFCL, HCL Technologies, HCL Infosys, NIIT Ltd, Pentamedia Graphics, Ranbaxy Labs, Satyam Computers, Silverline Industries, SSI Ltd, and Zee Telefilms. It realised a profit of Rs 93.6 crore from the sales of these scrips.
IDBI, on the other hand, had invested Rs 37 crore in equities during the same period. It realised profits of Rs 75 crore from the sale of these shares, the bulk of the profit coming from the sale of HFCL shares.