Vijay Mallya, UB Group chairman, is under CBI scanner.
The agency has registered a preliminary enquiry (PE) against Kingfisher Airlines, the first such by an investigating agency, and IDBI Bank, in connection with the Rs900 crore it loaned to Mallya's now-defunct airlines.
The investigating agency registered the PE after finding IDBI's report "not convincing". The agency asked the public sector bank why it provided Kingfisher with the loan when the company was in the red. The bank's answers were not convincing, a CBI source said.
Prima facie evidences indicate the involvement of bank officials, the source said. The CBI will look into Mallya's role — the representation he gave to avail Rs900 crore. Also, it will investigate if Mallya used the money for the purpose he took it for.
Once the investigations are completed, the CBI is likely to file an FIR. Currently, investigations are in an early stage because IDBI officials are apparently reluctant to part with files related to the loan. "Some files have arrived. We will soon obtain the rest," the source said.
A 2009 internal report by the bank had warned that Kingfisher was in the red. Despite that report, the bank went ahead and sanctioned a loan of Rs900 crore.
Kingfisher has a total debt of about Rs12,000 crore (with interest on a principal of about Rs8,000 crore). It had taken loans from a consortium of 17 banks. SBI was the lead lender, giving away almost Rs1,500 crore to Kingfisher from its kitty. The CBI is waiting for the response of SBI and other banks to take further action against Kingfisher.
As reported earlier in dna, CBI approached SBI in this regard. But SBI sent back CBI officials, saying they are conducting a personal audit in the matter and would submit the report to the agency, if needed. But in the case of IDBI Bank, the CBI found sufficient evidence to register PE, the source said.
Earlier this year, the All India Bank Employees' Association released a list of 406 defaulter accounts amounting to Rs70,300 crore. Kingfisher tops this list as well.
The CBI's Bank Securities and Fraud wing is looking into a number of cases of bad debts, amounting Rs2 lakh crore. As of now, the agency, while investigating NPAs of public sector banks, has registered 27 cases against nine companies (Kingfisher not among then) figuring in the list of top 30 wilful defaulters.
dna had earlier reported how two Kolkata-based banks were taking conflicting positions when it came to describing Kingfisher. While United Bank of India termed the Mallya-owned company a wilful defaulter, UCO Bank appeared reluctant to call it so. United Bank filed a winding-up petition against the company in the Calcutta high court. UCO's argument was it could term the airline a wilful defaulter only if it had some evidence.