 "Vijay Mallya")
The Central Bureau of Investigation (CBI) is conducting raids on liquor baron Vijay Mallya and his defunct Kingfisher Airlines in connection with alleged loan default of Rs 900 crore.
The agency is investigating a loan default worth Rs 900 crore sanctioned by IDBI Bank to Mallya’s company despite the airline's negative credit ratings and net worth.
The raids are being conducted in five locations – three in Mumbai, one in Bangalore and one in Goa – in the office and residential complex of Mallya, CBI sources said.
"A case has been registered against Vijay Mallya, director of Kingfisher Airlines, A Raghunathan chief financial officer of said firm and other unknown officials of IDBI Bank for allegedly violating banking norms in sanction and disbursement of credit limits of Rs 900 approximately," said a CBI spokesperson.
The CBI had registered a preliminary inquiry against IDBI Bank and Kingfisher Airlines in August. “It was the first exposure to the bank. There was no need for the bank to take the exposure outside the consortium when already other banks loans were getting stressed,” the CBI had alleged while initiating the probe last year.
During the preliminary inquiry, the agency examined officials of IDBI Bank seeking answers on sanctioning the loan to the airline, ignoring its own internal report which had warned against such a move.
The debt-ridden Kingfisher Airlines, which had stopped operations in October 2012, owed Rs 7,500 crore to a consortium of banks led by State Bank of India.
The CBI has been looking into rising non-performing assets (NPAs) of public sector banks and has registered dozens of cases against defaulting companies in the past.
