Probe finds top bank officials guilty of helping Kingfisher

NEW DELHI: REPORT ALLEGED THAT AN SBI CAPS OFFICIAL “FRAUDULENTLY INDUCED BANKS TO CONVERT PART OF DEBT INTO PREFERENCE SHARES BY DECEPTIVE PROJECTS”

The Serious Fraud InvestigationOfficehasfoundtop officialsatstate-backedSBICapital Markets and private firm Ambit guilt of allegedly helping theerstwhile Kingfisherairlines defraud lenders, the agency’s probereportaccessedbyHTsaid.

Kingfisher, once India’s second-biggest airline, stopped flyingfiveyearsagoforwantofcash, leaving its creditors, mostly state-backed banks, staring at nearly ₹9000 in bad debts. Banks havealsosoughttohaveitsflamboyant promoter Vijay Mallya, who moved to London last year, declared a “wilful defaulter”.

At least one anti-corruption court has named him a proclaimed offender in India, which is seeking his extradition.

TheSFIObeganinvestigating Kingfisher for alleged financial irregularities in 2015. In its report,theagencyhasfoundMallya, Kingfisher’s former chief financialofficer ARaghunathan and other board members of the UB Group such as AK Ravi Nedungadi guilty of corporate mismanagementandfinancialirregularities.

Italsobroughtchargesoffraud and violation of the companies act against Supratim Sarkar, executive vice president of SBI CAPS, Ashok Wadhwa, managing director of Ambit Corporate Finance Pvt Ltd and two former valuers of Grant Thornton LLP.

The SFIO deals only with violations of the companies act. It hasrecommendedthatprosecuting agencies such as the Central BureauofInvestigationandCentral Vigilance Commission be brought in to examinetheroleof bank and government officials.

Unlike the SFIO, the CBI and CVC can press corruption chargesundertheIndianPenalCode.

Sarkar, the report alleged, “fraudulently induced banks to convert part of debt into preference shares by deceptive pro-