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Home loan scam: Companies inflated asset value says Economic Offences Wing

The Economic Offences Wing (EOW) of the Central Bureau of Investigation (CBI) investigating the multi-crore loan scam suspect that the companies that benefited in the syndicate may have inflated their assets value.

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The Economic Offences Wing (EOW) of the Central Bureau of Investigation (CBI) investigating the multi-crore loan scam suspect that the companies that benefited in the syndicate may have inflated their assets value and balance sheets in order to make themselves eligible for more loans than their actual eligibility.

A similar kind of profit ‘inflation’ was observed during the investigation of Satyam scam, in which Ramalinga Raju reportedly told his interrogators that he falsified the assets and profits for years, in order to project his company to be successful and thereby attract more investments.

"We are investigating the case from all angles," said a CBI official. CBI on Wednesday busted a corporate scam in which top executives of at least four public sector banks, and a leading financial services firm, have been involved in swindling of thousands of crores of rupees.

The officials said that Money Matters India Pvt Ltd has been acting as mediators and facilitators for corporate loans. They would allegedly bribe the top officials of the public sector banks and financial institutions for facilitating large scale corporate loans. This was done to get the loans passed even when the corporates seeking such loans were not eligible for it.

A CBI official explained how the corporate companies contacted Money Matters India Pvt Ltd to raise a loan. If the loan requirement was large but did not match with the company’s eligibility, then these companies with the help of Money Matters would allegedly ‘over value’ the company’s assets and balance sheets. CBI officials added that this could not have been possible without help from the property valuers, auditors and the arrested bank executives.

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