No wrongdoings found in functioning of Carnation Auto by bankers: Ex-Maruti chief Khattar

Jagdish Khattar, who has been booked by the CBI for an alleged bank loan fraud of Rs 110 crore, said no lapses in operations or financial management were found in the company.

Published: 25th December 2019 09:58 AM  |   Last Updated: 25th December 2019 09:58 AM   |  A+A-


For rpresentational purposes (File Photo)


NEW DELHI: Hours after being booked by the CBI over alleged loan fraud, Maruti Suzuki's flamboyant ex-chief Jagdish Khattar on Tuesday said that an exhaustive independent forensic audit at the behest of the bankers did not find any wrongdoings in the functioning of Carnation Auto, which he had created post-retirement.

Khattar, who has been booked by the Central Bureau of Investigation (CBI) for an alleged bank loan fraud of Rs 110 crore, said no lapses in operations or financial management were found in the company by the investigating audit authorities and expressed hope that he will be vindicated once the probe is over.

"Post its (Carnation Auto) failure as a business, an exhaustive and detailed independent forensic audit at the behest of the bankers under the resolution professional was conducted by a leading independent auditor and nothing was found amiss," Khattar said in a statement.

Having found no lapses in operations or financial management, the bank (Punjab National Bank) has referred the matter to the CBI as part of the process followed by them, he added.

Khattar was with Maruti Udyog Limited from 1993 to 2007 when he retired as Managing Director of the company.

After retirement, he had launched Carnation for which he got a loan of Rs 170 crore in 2009.

The loan was declared a non-performing asset in 2015 with effect from 2012, the FIR said.

The agency has registered an FIR under IPC sections related to criminal conspiracy and cheating on a complaint from Punjab National Bank.

Khattar said he had invested his life savings in the company.

"I understand the bank is following a process. I have always made myself available and will continue to fully cooperate with all the agencies. The claims being made were examined in great detail during the forensic audit and we provided satisfactory replies on each," he said.

Khattar further said: "We were cleared in the forensic audit on each count. I have no doubt we will be vindicated again once the investigation is completed."

Carnation Auto was a first mover to create an open multi-brand auto solutions platform for customers whose cars were outside warranty period and who felt pinched by high maintenance costs.

It unfortunately became a bonafide business failure on account of many reasons including cartelisation by auto majors by non-supply of genuine parts, Khattar said.

Carnation was a board managed company with the highest ethical standards and best management practices, he added.

"Some of the most reputed investors in the country including Premji Invest and Gaja Capital were board members who, in their own interest, kept a tight vigil on its operations and finances," Khattar said.

Each financial decision was based on comprehensive business plans and approvals and the company was finally sold to Mahindra Group, he added.

The CBI has alleged that Khattar and his company dishonestly and fraudulently sold the goods hypothecated to the bank without its permission and diverted the funds thereby causing criminal breach of trust and cheating that caused wrongful loss to the bank and gain to Khattar and his company.

The bank had conducted a forensic audit which showed that fixed assets to the tune of Rs 66.92 crore were sold for a consideration amount of Rs 4.55 crore without its approval, they said.

It is also alleged that sale proceeds were not deposited with the bank and Khattar had dishonestly and fraudulently extended loans and advances to its sister concern/subsidiaries also.

The bank officials allegedly did not do mandatory monthly verification of stock and cross-check the debtors/creditors, the FIR said adding role of bank officials will be under scanner.

The bank had mentioned five accused persons in its complaint including three guarantor companies-- Khattar Auto India Pvt Ltd, Carnation Realty Pvt Ltd and Carnation Insurance Broking Company Pvt Ltd but their direct role did not surface during the verification exercise.


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp