Beleaguered business tycoon Vijay Mallya had no intention of paying back a loan sought and received from IDBI Bank, the Central Bureau of Investigation (CBI) was quoted as saying in a report by The Times of India.
IDBI Bank is a part of the 17 banks’ consortium that is seeking to recover its dues from Mallya while he stays away from the Indian judiciary and agencies, in London, where he has been since March 2 last year.
According to the report, while Mallya posed as a personal guarantor for a Rs 1,300-crore loan, his net worth shrunk nearly 80% only nine days after that when he had to give a personal guarantee.
“Vijay Mallya shrank his declared net worth by 80% in nine days. While his statement of assets in respect of an earlier term loan gave Rs 1,395 crore as his net worth on March 31st 2009, at the time of offering a personal guarantee his net worth was shown as only Rs 285 crore,” the report said.
Considering this, the investigative agency said that Mallya had no intention of repaying the loan and said there was a ‘criminal conspiracy to this end’.
The CBI also said that IDBI Bank went easy on the terms and conditions for sanctioning the loans to Kingfisher Airlines, sometimes “did not fall within IDBI Bank’s own parameters for credit worthy companies”.
Here’s how sanctions were deliberately overlooked by IDBI Bank, according to the CBI (according to the TOI report)
1) Loans were given to a company that was rated sub-investment grade
2) Additional security from Mallya wasn’t sought
3) IDBI Executive Director BK Batra, Deputy MD OV Bundellu, Executive Director SKV Srinivasan with the consent and knowledge of Yogesh Agarwal, omitted to include the pledge of unencumbered shares as collateral
4) A short term loan of Rs 150 crore and corporate loan of Rs 750 crore were not recovered despite being for the same purpose
5) A request for unemcumbered shares for additional security was denied by Mallya. The CBI has an email from Mallya to his chief finance office saying “IDBI Bank cannot be given additional shares as they are part of the same consortium and will be entitled to the same securities as other banks.”
The CBI’s allegations come only days after markets regulator, the Securities and Exchange Board of India (Sebi) barred Mallya from the markets and curtailed his right to hold directorship or chairmanship in any listed company in the country.
Mallya has been quite vocal about his views on both the instances on Twitter.
After Sebi orders, Mallya cried foul, calling the move as a “witch hunt from all the directions with no legal bias.”
For 30 years I built the Worlds largest Spirits Company n India’s largest Brewing Company.Also launched the finest AirlineThis is what I get— Vijay Mallya (@TheVijayMallya)
After the CBI reports, he said,
KFA collapsed with oil at $ 140/barrel and State sales tax on top Rupee devaluation No FDI Engine failures. Economic depression Need more ?— Vijay Mallya (@TheVijayMallya)
And KFA being the largest domestic Airline was the worst hit. Government bailed out Air India but did not bail out KFA.So much for “favours”— Vijay Mallya (@TheVijayMallya)