Jagneswar Babu, secretary general of Odisha Jana Morcha (OJM) was arrested for his alleged role as president of Odisha State Cooperative Bank (OSCB) in sanctioning ` 36.18 crore as loans to a cooperative sugar mill two years ago. He was president of Bijoyananda Cooperative Sugar Mills, Balangir when the loan was sanctioned and disbursed.
The State Vigilance said Babu, in connivance with Loan Committee members of the bank sanctioned the loan illegally without adequate security and blatant violation of Nabard guidelines.
The decisions were not even placed before the executive committee of the bank. The fact that the sugar mill had accumulated losses of ` 5.8 crore and defaulted payments was ignored. “As president of the sugar mill, therefore as a borrower, Babu should have recused himself from the bank’s Loan Committee proceedings. Inquiry revealed that Babu and MD of OSCB Tushar Kanti Panda abused their official positions,” the SP of Vigilance Cell, Cuttack, Sashi Bhusan Mishra said.
In its inquiry, the Vigilance said, the loans were not utilised for the purpose for which they were sanctioned and disbursed, rather those were siphoned off and diverted in an unauthorised manner causing a huge loss to the state exchequer.
As of now, Rs 37.22 crore of the loan was outstanding. It added that the bank should have restricted its credit exposure to the sugar mill since the financial assistance exceeded Rs 20 crore but did not do so.
The anti-corruption wing, which interrogated Babu before arresting him as the main conspirator, lodged an FIR against Babu and six others.
It said that he entered into a criminal conspiracy with other Loan Committee members and fraudulently sanctioned crop loans amounting to Rs two crore for disbursal to farmers.
Subsequently, the sum was enhanced to Rs 15 crore but bulk of the loan was not even disbursed to farmers and siphoned off.