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CBI begins to investigate IDBI Bank's Rs 900 crore-loan to Kingfisher Airlines

Sunday, 10 August 2014 - 12:15pm IST | Place: Mumbai | Agency: dna webdesk

The Central Bureau of Investigation (CBI) has begun its investigation on a Rs 900 crore loan that IDBI Bank gave to Kingfisher Airlines, Reuters reported. Kanchan Prasad, a police spokesperson told Reuters that CBI is investigating why the bank gave out the loan to the airlines led by Vijay Mallya when it had a negative net worth and negative credit rating. "The CBI has registered a preliminary inquiry to inquire into the role of IDBI and Kingfisher Airlines," she said. "There was no need for the bank to take the exposure outside the consortium when already other banks' loans were getting stressed", she said.

DNA reported on Saturday that Vijay Mallya, the UB group chairman is udner CBI scanner and that the preliminary enquiry had been registered against them. The CBI had asked IDBI Bank for a report and was not convinced with the answer that the bank provided. 

"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," dna reported. After the investigation, the CBI could file an FIR against the parties involved in the transaction.

Prakash Mirpuri, a spokesman for UB Group, Kingfisher's controlling shareholder, told Reuters: "We have not received any communication and are unaware of any such inquiry."

A 2009 internal report by the bank had warned that Kingfisher was in the red, despite which the loan was sanctioned. The airlines owes around Rs 12,000 crore to a consortium of 17 banks. SBI has given Rs 1500 crore, a bank that is also due to supply its report to CBI. 

SBi had sent back CBI officials when they approached for the report, and had said they were running an internal audit and would submit the report if required.

The United Bank of India has already termed Kingfisher as a wilful defaulter while the UCO Bank refuses to call it so.


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