The CBI today arrested eight people, including the chief executive officer (CEO) of LIC Housing Finance, Ramachandran Nair, for allegedly giving corporate loans for monetary considerations.
The season of scams continues. Even as the country reels under the telecom and microfinance controversies, another scandal was revealed by the CBI on Wednesday.
The investigating agency on Wednesday arrested Ramachandran R Nair, chief executive officer of LIC Housing Finance Ltd, and seven officials of public sector banks after a year-long investigation into a loans scam, where bribes were taken to disburse loans, including those for housing projects. The Economic Offences Wing of the CBI carried out the arrests under the Prevention of Corruption Act. All the eight people arrested have been remanded in custody till November 29.
Among those arrested are Naresh Chopra, secretary, investments, LIC; RN Tayal, general manager, Bank of India, Mumbai; Maninder Singh Johar, director, Central Bank, New Delhi; Venkoba Gujjal, deputy general manager, Punjab National Bank, New Delhi; Rajesh Sharma, Suresh Sharma and Suresh Gattani of Money Matters Financial Services Ltd.
Money Matters was acting as a mediator and facilitator for corporate loans and credit extended to builders, P Kandaswamy, the CBI’s inspector general for Mumbai Zone 2, said. Its officers were bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans, he added.
The public servants were allegedly providing highly confidential information about companies and rivals to Sharma’s clients, helping them benefit in the stock market among other places.
Sharma would also persuade the officers not to oblige companies who are not routing their work through him.
In return, Money Matters gave crores of rupees as a bribe and even provided a flat in one case. There were other forms of gratification too.
Special public prosecutor Ejaz Khan said the sleuths recorded certain telephonic conversations between the accused and Tayal that involved bribe-taking and bribe-giving.
During a search of Money Matters officer at Unit 1, Court Chambers in New Marine Lines, the CBI found 189 gold coins, gift vouchers worth nearly Rs5 lakh, Rs12.12 lakh in cash, and a large number of incriminating documents. It also found cash amount of Rs10.15 lakh from Sanjay Sharma’s house.
Special CBI judge VR Sikchi remanded all the accused to CBI custody till November 29.
Not surprisingly, the Bombay Stock Exchange Sensex fell 231 points. Shares of LIC Housing Finance were down 18%, and banking shares too fell in reaction.
LIC Housing in an e-mailed statement said it will take necessary steps to safeguard interests of stakeholders after its chairman was arrested.
Meanwhile, the government said the housing finance racket unearthed by the CBI, leading to the arrest of the CEO of LIC Housing finance and other senior officials of public sector banks, is a bribery case involving some individuals and not a large-scale scam. “It’s an individual case of bribery. There is no large-scale scam. Banking system is sound,” minister of state for finance Namo Narain Meena said.
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