Rs 600-crore loan fraud: Bank officials get no relief as plea to quash criminal case binned
The Madras High Court has refused to quash the criminal case filed by the CBI against the officials of Industrial Development Bank of India (IDBI) in connection with Rs 600 crore loan fraud.
CHENNAI: The Madras High Court has refused to quash the criminal case filed by the CBI against the officials of the Industrial Development Bank of India (IDBI) in connection with Rs 600 crore loan fraud.
Dismissing the petitions filed by the former and current top officials of the IDBI bank to quash the criminal cases filed under sections of the Indian Penal Code (IPC) for alleged cheating, Justice G Jayachandran, in a recent order, rejected the contention that the case under IPC cannot sustain when the Central government and the IDBI refuse to accord sanction to proceed against the officials under the Prevention of Corruption Act (PCA).
“Refusal to grant sanction by the competent authority for prosecution under the PCA cannot certainly be an umbrella for offences under IPC also,” he held, adding the officials were exonerated in the departmental inquiry but it cannot be a reason to quash the criminal case.
He observed, “The sanction of loan to a company registered in foreign soil to repay the loans of other companies defaulted in India and abroad does not sound prudent by any stretch of the imagination, more so when the said loan remains unpaid.”
The matter involves Rs 600 crore loan fraud committed by the group of companies belonging to entrepreneur C Sivasankaran in collusion with the top officials of IDBI. The bank, in 2010, had sanctioned a loan of Rs 322.40 crore to a shell company Win Wind Oy (WWO) registered in Finland. Later, it was given bankruptcy on default of payment.
However, the top officials were accused of conspiring to sanction another loan of `530 crore to Sivasankaran’s firms in 2014 for a ‘non-productive purpose’ resulting in a huge loss to the bank, besides withdrawing the recovery proceedings.
Based on a complaint from the Central Vigilance Commission (CVC), the Banking Securities Fraud Branch (BSFB) of CBI registered a case against 15 officials of IDBI and others including Sivasankaran.
Slamming the bank officials for sanctioning a further loan in the garb of ‘restructuring’ the outstanding loan as a ‘prudent action’, the judge said, however, a common man, with less prudence, would have proceeded against the corporate security for the recovery of the outstanding amount of Rs 390 crore instead of giving a further loan.