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IDBI Bank fraud: CBI books former Aircel promoter Sivasankaran, top bankers for Rs 600-crore loan scam

The CBI has also booked top officials of two public sector banks, a former CMD of IDBI Bank.

twitter-logoBusinessToday.In | April 27, 2018 | Updated 08:34 IST
IDBI Bank fraud: CBI books former Aircel promoter Sivasankaran, top bankers for Rs 600-crore loan scam

Once he was hailed as a deal master, but now Chinnakannan Sivasankaran, better known as Siva, is grabbing headlines for all the wrong reasons. The CBI has registered a case against the former Aircel promoter, his son and companies controlled by him - Axcel Sunshine Ltd and Finland-based WinWinD Oy - for allegedly defaulting on loans worth Rs 600 crore taken from IDBI bank.

The CBI has also booked top officials of two public sector banks, a former CMD of IDBI Bank. The agency has named 15 bank officials who worked at senior levels at IDBI Bank in 2010 and 2014 when loans were sanctioned to the companies controlled by Sivasankaran in its FIR registered on a complaint from the Central Vigilance Commission.

Managing Director and CEO of Indian Bank Kishor Kharat (who was then MD and CEO of IDBI Bank) and his counterpart in Syndicate Bank Melwyn Rego (then Deputy Managing Director in IDBI Bank), along with then Chairman-cum-Managing Director of IDBI Bank M S Raghavan have been named in the FIR.

"It was also alleged that the loans were granted to the companies by IDBI Bank at its highest decision-making level comprising senior most management and even Independent Directors, disregarding the existing guidelines, instructions and procedures," CBI spokesperson Abhishek Dayal said. 

The case has been registered under sections relating to criminal conspiracy, cheating and corruption against British Virgin Islands-based Axcel Sunshine Limited on allegations of perpetrating fraud through the loan accounts of WinWind Oy, Finland and Axcel Sunshine Limited, the officials said. Siva allegedly took a loan of Rs 530 crore in February 2014. This swelled to Rs 6 billion after becoming NPA, they said.

Incidentally, according to the Business Standard, the Supreme Court of Seychelles declared Siva bankrupt the same year, 2014. In October the previous year, WinWinD, his Finland-headquartered wind turbine venture, submitted a voluntary bankruptcy petition because it had "been incurring heavy losses for the past several years" and its debts had ballooned to around Rs 300 million.

Subsequently, various conditions were relaxed or all together ignored. This led to an alleged loss of approximately Rs 600 crore to the bank and public exchequer, he said.

The case pertains to loans of Rs 322 crore and Rs 523 crore given to the companies of Sivasankaran, who was in the centre of Aircel Maxis probe for alleging that then Telecom Minister Dayanidhi Maran had put pressure on him to sell his company to a Malaysian telecom tycoon, a case in which Maran brothers have been discharged by a special court. The loans later turned non-performing assets or NPAs.

The loan of Rs 322 crore was allegedly issued to Finland-based Win Wind Oy (WWO) by IDBI Bank in October, 2010 which turned into a non-performing asset three years later, the CBI has said in its FIR.

"The performance of said company showed stress and it was eventually granted voluntary bankruptcy by a court in Finland in October 2013," he said.

The holding company of the WWO is Siva Investments and Holdings Limited based in the Seychelles which is again controlled by Siva Group of Companies chaired by C Sivasankaran, the agency alleged.

When WWO went into liquidation, IDBI Bank sanctioned another loan of Rs 523 crore to Axcel Sunshine Limited based in British Virgin Islands, a tax haven, in February 2014 which is also a company associated with Siva Group of Companies, it alleged.

"This (Rs 523 crore loan) was allegedly used for repaying other loans of other associate companies of this group (including WWO) in flagrant violation of the regulatory guidelines of RBI on foreign investments in India. This loan also turned into NPA in 2015", Dayal said.

The loan has been fully provided for and it has initiated actions to recover dues from the borrower in August, 2016, IDBI Bank said in a statement.

The agency has also booked C Sivasankaran, his son Sivasankaran Saravanan, the then Directors of WWO Sanjeev Bafna, Tuomo Ronkko and Henry Grundsten, then Directors of Axcel Sunshine Nithyavathy Venkatesan, Gurunathan Pakkiriswamy, V Srinivasan and others.

They said the agency carried out searches at 50 locations, including the residences of former and serving senior IDBI Bank officials. The searches were spread across Delhi, Faridabad, Mumbai, Gandhinagar, Chennai, Bangalore, Belgaum, Hyderabad, Jaipur and Pune, the officials said.

They said 15 senior officers of IDBI Bank, including retired officials, and 24 private officials, including directors and chairmen, and their companies have been booked.

Other bank officials booked by the agency are--Deputy Managing Director IDBI Bank G M Yadwadkar, former Deputy B K Batra, former Independent Directors of the bank P S Shenoy, S Ravi, Ninad Karpe, then chief general manager Subroto Gupta, former EDs Viney Kumar and B Ravindra Nath, General Managers K Biju George, Venkata Krishnan, G Suneel Babu, then Regional Manager Manoj Alex (presently DGM).

The companies also included in the FIR as accused British Virgin Islands-based Broadcourt Investments and Lotus Venture Investments, Mauritius-based Indian Telecom Holdings, Singapore-based Siva Palm Corp Ltd and India-based Siva Industries and Holdings Ltd, Win Wind Power, Planet Pickles, Sterling Agro Product and Processing Pvt Ltd and Siva Industries.

What a rollercoaster ride for a man who started off as a fabrication contractor for Chennai Petroleum Corporation before moving on to the computer and telecom gravy trains - buying rapper MC Hammer's house along the way - to bankruptcy and a brush with the authorities.

With PTI inputs


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