Kingfisher Not the Only Beneficiary of IDBI’s Loan Process, Says CBI
Sun Direct TV, Strides Arcolabs, S Kumar’s, Kolte Patil and Marathon Realty also got loans, agency’s charge sheet states
Mumbai: The CBI in its charge sheet has said Kingfisher Airlines was not the only company with poor credit rating to have got its loans sactioned by IDBI Bank executives, but many others such as Strides Arcolabs, Sun Direct TV, Kolte Patil Developers, S Kumar’s and Marathon Realty have also been beneficiaries of such a process.
The Central Bureau of Investigation, which has made credit rating one of the key charges to highlight favouritism by IDBI Bank officials to Vijay Mallya, has said at least 38 companies with Double B minus rating — similar to Kingfisher Airlines — and two with a lower rating of B were given loans between April 2009 and March 2010, the period when KFA was funded.
A loan appraisal note prepared by the State Bank of India — a copy of which was also made available to IDBI Bank — suggested that KFA needed ₹ 2,500 crore of loans to meet various obligations. Of this ₹ 2,000 crore was to be financed by banks and the remaining ₹ 500 crore as equity from Mallya.
Representations made in the CBI special court on Tuesday indicated that IDBI Bank officials relied heavily on the loan appraisal documents and decided to extend ₹ 1,050 crore to Kingfisher Airlines. Prior to approaching SBI, the troubled airlines had already availed loans aggregating to ₹ 4,998.50 crore from various banks under multiple banking arrangements.
Of the ₹ 2,500 crore required by KFA, SBI had sanctioned ₹ 500 crore, while Bank of Baroda, United Bank of India and Bank of India had all sanctioned ₹ 200 crore each, claimed CBI.
The SBI loan appraisal document had also noted that Kingfisher was not an exception as eve-
ry single airline was facing trouble due to the then prevailing high Aviation Turbine Fuel (ATF) prices, low passenger traffic and piling losses. The government’s policy to help industries such as aviation was probably a key factor in bankers deciding to fund KFA.