CBI books former Maruti MD in `110 crore bank fraud case

NEW DELHI: The former Managing Director of Maruti Udyog, Jagdish Khattar has been booked by the CBI in a Rs 110 crore bank fraud case, in which the central agency on Monday also conducted raids at his official and residential premises in Delhi-ncr, officials here said on Tuesday.

The Central Bureau of Investigation has alleged that Khattar’s homegrown Carnation Auto India Limited had defaulted on a Rs 110 crore loan from Punjab National Bank and according to the bank’s complaint had allegedly conspired with bank officials to defraud the bank of the owed amount. However, in a statement released after the CBI’S FIR became public, Khattar said Carnation was a bonafide business failure and that “there is no wrongdoing” involved in the matter. “A detailed forensic audit was also conducted earlier this year by a leading independent auditor and nothing amiss was found,” he said, adding that the bank had now referred the matter to the CBI as “a part of the process followed by them”.

While the CBI has said that searches were conducted at Khattar's Noida residence and Carnation's East Patel Nagar office and several documents were recovered which are now being scrutinised as part of the investigation, Khattar has maintained that “nothing incriminating was found” in the searches.

Officials with direct knowledge of the matter added that the searches were also conducted at the premises of one of the company's Chartered Accountants, from where evidentiary materials were recovered.

The CBI'S FIR alleged that PNB had sanctioned a term

loan of Rs 170 crore in May 2009, following which it was increased by Rs 10 crore and then subsequently restricted to Rs 110 crore. The bank only declared Carnation's account as a Non-performing Asset in September 2015 but with effect from June 2012. Interestingly, records of the Registrar of Companies show that Carnation had posted a cumulative

loss of Rs 278 crore between 2009-10 to 2013-14.

The central agency has also alleged that a forensic audit conducted by the bank through a third-party showed that Carnation had “dishonestly and fraudulently” sold fixed assets worth around Rs 66.92 crore for a meagre sum of Rs 4.55 crore without taking approval from the bank. The forensic audit had found that these fixed assets had been furnished as security to the bank at the time of sanctioning the loans and the proceeds of sales were not deposited with the bank.

The CBI'S case is based on a PNB complaint from October this year, which also mentioned three other Khattar-related companies as accused, given their listing as guarantors of the loans, but the agency has said that “no direct role” of the guarantors has been found in the fraud and have, as a result, not been named in the FIR.

Officials added that their role will be ascertained in detail during the course of the probe.

The central agency has also said that bank procedures call for the concerned bank officials to verify the stock of the borrowing company every month and to cross-check the debtors/ creditors, but this “appears to have not been done”, the FIR read, adding that bank officials will also be looked into during the investigation.