The CBI on Saturday searched residences and offices of flamboyant business tycoon Vijay Mallya and his now-grounded Kingfisher Airlines in the case of a Rs 900 crore loan by state-run IDBI Bank and now declared a non-performing asset (NPA) and registered a case against him and others.
A case of criminal conspiracy, criminal breach of trust by public servant and corruption, was registered against the airline as well as its director Mallya, who is an independent Rajya Sabha member from Karnataka, chief financial officer A Raghunathan and unnamed bank officials following raids at five places - at the airline's offices and at residences of Mallya and others in Bengaluru, Mumbai and Panaji, said agency officials.
"The Central Bureau of Investigation has registered a case against then director of Mumbai- based airlines, his said company; then CFO of said private company and other unknown officials of IDBI Bank," a CBI statement said.
"It is alleged that officials of IDBI colluded with the promoters/directors and CFO of said airlines and sanctioned credit limits of Rs 900 crore (approx) in violation of banking norms, thereby causing loss to the said bank by such fraudulent act," it said.
It said that searches were conducted on Saturday at three places in Mumbai and one each in Bangalore and Goa in the offices and residences of the accused.
"Several incriminating documents found during searches are being scrutinized. Further investigation is in progress," the statement added.
In Goa, a CBI team from Mumbai raided the Kingfisher Villa, Mallya's expansive property in the tony Candolim beach area, located 15 km from Panaji.
The Bengaluru-based United Breweries, the holding company with substantial equity stake in the airline, admitted that CBI officials visited its office in Bengaluru, Mumbai and near Panaji.
"We cooperated with the officials and provided required documents and will continue to offer cooperation," it said in a statement.
The loan was advanced by the IDBI bank despite the fact that there was uncertainty about huge loans earlier extended by a 17-member consortium of banks to the airlines being paid.
Some of the banks in the consortium have already declared Mallya as a "wilful defaulter".
Sources said what raised suspicion was the fact that it was the first exposure of the Kingfisher to the bank and the big loan was granted despite negative rating and net worth of the airlines.
While registering the preliminary enquiry in 2014 into the questionable sanction of loan by IDBI, the CBI had said: "There was no need for the bank to take the exposure outside the consortium when already other banks loans were getting stressed."
Debt-ridden Kingfisher Airlines was virtually grounded on October 1, 2012 as the passenger carrier cancelled all 50 flights after a section of its employees went on strike leaving thousands stranded, while it failed to pay dues running into crores to its service providers, including state-run oil firms, Airport Authority of India (AAI) and consortiums of Mumbai and Bengaluru airports. It lost its operator's licence on October 20, 2012.
A string of Indian banks have an exposure of nearly Rs 7,000 crore in loans to the airline, with State Bank of India (SBI) leading with Rs 1,600 crore.
Punjab National Bank (PNB), Bank of India and Bank of Baroda have loan exposure in the range of Rs 800 crore, Rs 650 crore and Rs 550 crore.
The consortium led by SBI was formed to recover the money.
The United Bank of India (UBI), which was owed Rs 400 crore by Kingfisher, first declared Mallya a wilful defaulter in May 2014. But Mallya's lawyers managed to convince the Calcutta High Court in December that the process of declaring him so was faulty.
However, after apex bank Reserve Bank of India (RBI) extended ambit of the term "wilful" defaulter to include not only the primary defaulting entity, but also the guarantors of loans, and individuals on the boards of companies declared to be in wilful default, Mallya was again declared a wilful defaulter this year.