CBI books former Maruti MD Khattar in PNB fraud case
NEW DELHI: Jagdish Khattar, former managing director of Maruti Suzuki India Ltd (MSIL), has been named by the Central Bureau of Investigation (CBI) in a cheating case linked to a ₹110 crore loan taken from Punjab National Bank (PNB) by a company he founded in 2008 after leaving India’s top automaker.
The first information report (FIR) was filed by the CBI on December 20, and Khattar’s house was searched on December 23, a CBI official said on Tuesday.
According to the FIR, Carnation Auto India Pvt. Ltd, a company set up by Khattar, 77, had taken a ₹170 crore loan from PNB in 2009.
The loan, which had been subsequently restricted to ₹110 crore, was declared a non-performing asset (NPA) in September 2015.
The accusation against Khattar and the company, which had been started with idea of setting up multi-brand car dealerships for new cars and service outlets across the country, is that they “dishonestly and fraudulently” cheated the bank by selling goods hypothecated to the bank without its permission and diverted the funds.
Khattar denied the allegations. “Carnation is a bonafide business failure. There is no wrongdoing. A detailed forensic audit was conducted earlier this year by a leading independent auditor and nothing amiss was found. The Bank has now referred it to CBI as a part of the process followed by them. Search was conducted by CBI, but nothing incriminating was found. We will be vindicated once the investigation is completed,” Khattar told
Khattar and Carnation Auto have been booked under sections of the Prevention of Corruption Act, and for cheating and criminal conspiracy in the FIR.
PNB’S Tolstoy House branch in New Delhi filed a complaint against Khattar and the company on October 17 this year, following which the case has been lodged.
The FIR said a forensic audit by the bank revealed that Carnation Auto sold assets worth ₹66.92 crore, which had been furnished as a security, for ₹4.55 crore.
“It has committed misappropriation of bank funds and has put them for own use,” said the FIR, a copy of which has been reviewed by
It is also alleged that sale proceeds were not deposited with the bank and the company dishonestly and fraudulently extended loans and advances to its sister concern/subsidiaries. Bank officials allegedly did not perform a mandatory monthly verification of stock and cross check debtors/ creditors, the FIR said, adding that the role of bank officials will be examined.
The bank mentioned five suspects 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 could not be established during the verification exercise.
“However, their role in detail will be ascertained during investigation,” the agency said.
Khattar left MSIL in December 2007 after being named managing director in 2002.