BENGALURU: As loan scams in the banking sector are making national headlines, the latest victim is the Union government’s own Industrial Finance Corporation of India’s (IFCI’s) regional office in Bengaluru, which caters to loan requirements in the industrial sector. The IFCI has alleged fraudulent valuation by two firms and involvement of insiders to help a stock trading company get a loan of R80 crore — after the two firms, which were IFCI’s own authorised evaluators, presented fraudulent asset valuation of the loan-seeking firm.
According to IFCI, the stock trading company — Sri Krishna Stockist & Traders Pvt Ltd — had taken a loan of R80 crore after IFCI’s authorised evaluators fraudulently valued its asset at R330.88 crore; but it turned out that the assets of the company were worth only R23 crore. According to the complaint letter and FIR copy, copies of which are with Express, as per IFCI’s policy, for granting any financial assistance, the prospective borrower has to provide surety by way of a charge on immovable/movable property (non-agricultural converted land), the distress sale value of which has to be at least 2-2.5 times of the loan amount depending upon the rating. In this case, it turned out to be one-fourth of the loan amount. Now, the Bank Security and Fraud wing of the CBI of Bengaluru has taken the up the case.
According to the CBI sources, Madhur Bajaj, AGM (law) of IFCI filed a complaint with them alleging T Kanna Rao, Managing Director, Sri Krishna Stockist and Traders Pvt Ltd, T Venkata Ramana, director of the firm, Andhra Pradesh Industrial and Technical Consultancy Organisation Ltd (APITCO), MITCON Consultancy and Engineering Services Limited have cheated them of R80 crore. APITCO and MITCON Consultancy are IFCI’s authorised evaluators. In 2014, Kanna Rao approached the Bengaluru regional IFCI office for corporate loan sanction of R150 crore in an email.
Kanna Rao allegedly showed 16 properties for mortgage at distress sale value, having tentative market value of R330.88 crore towards the loan. Credit Investment Committee (CIC) of IFCI then sanctioned the R 80 crore loan in two installments, each of R40 crore. It was done only after APITCO and MITCON valued the land price and said the assets distress sale value would be around R203.06 crore to R206.30 crore. From June 2017, the stock firm MD and director started defaulting on obligations. Later, the loan account was classified as Non-Performing Assets (NPA) and the outstanding amount then was R80,00,93,046.
The shock to IFCI came when they revalued the assets from two independent valuers, who reported stating the distress sale value was R11.05 crore and R23.98 crore. According to IFCI, it was evident that its own authorised valuers had grossly inflated the valuation. In the internal investigations, then Bengaluru Regional Office head VC Ram Mohan was suspended.
Last month, Anti-Corruption Bureau of CBI had registered a case against VC Ram Mohan for having disproportionate assets worth R 3.9 crore, which amounts to 205 per cent increase against his and family members’ income. In 2007, his properties were valued R7.8 lakh and it grew to R3.03 crore by the end of March 2017. Ram Mohan and his family had an income of R1.9 crore, and they incurred an expenditure of R 2.86 crore, which included donation of Rs three lakh made by his wife to Tirumala Tirupati Devasthanams (TTD).