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

The Economic Times - - Companies: Pursuit Of Profit - Saloni.Shukla@ times­group.com

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.

VARANI SAHU

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.