LIC loan scam: Fresh CBI probe into DB Realty

Mumbai: Nearly a year after it busted an alleged bribes-for-loans scandal involving LIC Housing Finance, some public sector banks and a host of private companies, the CBI has quantified the loans disbursed in the case at Rs 12,000 crore.

The agency has also registered a fresh Preliminary Enquiry (PE) against DB Realty, as it allegedly availed of a loan of Rs 300 crore even though it failed the eligibility norms for corporate loans.

The CBI had last November claimed that it had smashed a massive loan racket and alleged that a Mumbai-based financial services company, Money Matters, was bribing senior officials of PSU banks and financial institutions for large-scale corporate loans.

It had arrested eight people, including the CEO of LIC Housing Finance, and top officials of Money Matters, LIC and the banks, but said quantification of size of the loans could be done only at a later stage in the probe. All the accused have since been released on bail.

The agency had registered five cases in the alleged scam and filed its first chargesheet in February. The rest were filed last week. The chargesheets name LIC Housing Finance CEO Ramchandran Nair, LIC’s Secretary (Investment) Naresh K Chopra, Bank of India General Manager R N Tayal, Punjab National Bank’s Deputy General Manager Venkoba Gujjal, Money Matters CMD Rajesh Sharma, its officials Suresh Gattani and Sanjay Sharma, and Central Bank of India Director (Chartered Accountant) Maninder Singh Johar.

“During our investigation we found DB did not pass even the basic eligibility for such corporate loans, but LIC Housing Finance sanctioned them a loan of about Rs 300 crore,” said a senior CBI officer from the probe team.

The new PE against DB was filed after investigators found a mismatch in the financial data of the company. “Numbers were inflated, forged and original documents too show astronomical figures,” the officer added. The enquiry was handed over to the Bank Security and Fraud (BS &F) cell last month.

LIC Housing Finance CEO Nair, the CBI alleged, played a key role in getting loans sanctioned for DB. “Nair’s assets multiplied in the last four years. He owns property worth nearly Rs 40 crore,” the officer said, adding that a Disproportionate Assets (DA) case has been registered against Nair, Gujjal and Chopra by the CBI’s Anti-Corruption Cell in Mumbai. The Delhi unit of the cell has registered a DA case against Johar.

The chargesheets allege that Nair, in connivance with Money Matters CMD Rajesh Sharma, would get loans sanctioned and earn commissions. While the CBI is still unsure if the 40 beneficiaries who availed loans though Money Matters were aware of its alleged dubious ways, it says DB Realty knew of the scam.

The chargesheets also allege that in 2009-10, similar loans were availed by the Mantri Group, another leading real estate company. According to the CBI, Rajesh Sharma had paid Nair a bribe of Rs 45 lakh to get a Rs 100 crore loan sanctioned for Mantri. In an affidavit filed before the CBI, Mantri denied any involvement in the scam.

The chargesheet also says that of the total commissions earned by Money Matters, 45 per cent came from LIC Housing Finance while the rest was contributed by Punjab National Bank, Bank of India and Central Bank.

Senior lawyer Harihar Bhave, who represents Nair, said he could not comment as he was yet to get the chargesheeet. “We would not know what exactly the chargesheet claims. We have not been able to get a copy of the chargesheet so far,” he said.

COMMENT FROM DB REALTY SPOKESPERSON

DB Realty has provided all documents as requested by the CBI and is cooperating fully. At this stage, we cannot disclose the subject matter or details of what has been shared with the CBI.

DB Realty would like to clarify that there has been no allegation of inflation of net worth, forgery of documents or the company not meeting the qualification parameters for the loan availed. DB Realty would also like to state here that of the Rs 188 crore availed from LIC, currently, only an amount of Rs 27 crore is outstanding. Again, a reflection on the low debt ratio of the company. All documents relating to the net worth of DB Realty and its group/associate companies are in the public domain viz. the DRHP and the Annual Reports and the same can be verified independently.

Also, we would like to clarify that there is no chargesheet filed against DB Realty or any of its officials in the LIC Housing matter.

As a reputed publication, DB Realty requests you not to publish factually incorrect and unverified information. Such false allegations only point to mala fide intentions aimed at hurting the image of the company. In such a situation, we will be left with no option but to take legal recourse against the publication.

Source: Financial Express