The CBI on Monday arrested former IDBI Bank Chairman Yogesh Agarwal in connection with the ₹900 crore loan default case of the Kingfisher Airlines.
Mr. Agarwal had earlier served as Managing Director of the State Bank of Patiala and the State Bank of India. He joined the IDBI Bank in July 2007 and quit in 2010 to join as Chairman of the Pension Fund Regulatory and Development Authority.
According to the CBI, Mr. Agarwal and other accused bank officials played an active role in the sanction of loans to the ailing airline despite its poor credit rating. The agency’s FIR alleges that the company had moved an application for a corporate loan of ₹950 crore on October 1, 2009. Just five days later, the company CFO A. Raghunathan met the top bank official seeking release of a short-term loan of ₹150 crore.
“On the same day, a memorandum was put up to the credit committee [comprising the then CMD and two members] and the facility was sanctioned, though the company was having negative financials and a negative net-worth,” alleges the FIR.
A month later, the FIR mentions, Mr. Raghunathan wrote another letter giving reference of a meeting between Mr. Mallya and the bank’s CMD and again requested for an ad hoc release of ₹200 crore. The amount released in the process was later subsumed in the corporate loan. On November 27, 2009, the bank had released the corporate loan of ₹750 crore.
Based on the CBI case, the Enforcement Directorate has launched a probe under the Prevention of Money Laundering Act and attached assets worth ₹1,411 crore.
