Loan default: Mallya’s Candolim villa raided

On October 10 India’s Central Bureau of Investigation (CBI) searched liquor baron Vijay Mallya’s home and offices on Saturday, in connection with a probe into a loan granted by mid-sized state lender IDBI to his now defunct Kingfisher Airlines.

A case has been registered against Mallya, the airline CFO A Raghunandan and other unnamed officials of the bank for sanctioning loan even though an internal note had suggested against sanctioning the loan. Kingfisher Airlines suspended operations in October 2012.

The raids were being held in Mumbai, Bangalore and Goa in the offices and residential places of Vijay Mallya and the premises of his Kingfisher Airlines.

The agency had questioned the public sector bank on why it provided Kingfisher with the loan when the company was in the red. “It was the first exposure to the bank”.

The sources said there was no need for the bank to take the exposure outside the consortium. Talking to reporters here a CBI spokesperson said that a case of criminal conspiracy under IPC section 120-B, along with criminal breach of trust provisions of the Prevention of Corruption Act, was filed in the matter. Mr Mallya would soon be called for examination in connection with the case.

The SBI’s loan exposure to Kingfisher was in the tune of Rs.1,623 crore and Bank of India, a medium-sized bank, is owed Rs. 308 crore.

While registering the preliminary enquiry in 2014 into the questionable sanction of loan by IDBI, the CBI had said, “there was no need for the bank to take the exposure outside the consortium when already other banks loans were getting stressed”. The day-long searches were conducted at five places in Bengaluru, Goa and Mumbai.

“The company co-operated with the officials and provided the necessary documents and will continue to offer co-operation”, the spokesman said in an email.

It is worth a mention that the premier investigative agency has already registered a First Information Report (FIR) in the alleged loan fraud case, which was declared Non Performing Asset (NPA).

Bengaluru-headquartered United Breweries Group is the parent company of Kingfisher Airlines.