CBI registers inquiry against Kingfisher Airlines, IDBI Bank

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New Delhi: CBI has started a preliminary enquiry looking into the Rs 950 crore alleged bad loan given by IDBI Bank to Kingfisher Airlines ignoring the company’s negative credit ratings and net worth.

CBI sources said the bank has failed to provide convincing answers on reasons to extend the loan to the crisis-ridden company. “It was first exposure to the bank. There was no need for the bank to take the exposure outside the consortium when already other loans were getting stressed,” a senior CBI official probing the matter said. The IDBI Bank Chairman could not be reached immediately for comments on the allegations. The sources said senior officials of the management of Kingfisher Airlines, part of the UB group promoted by liquor baron Vijay Mallya, and IDBI Bank will be examined soon for explaining the reasons for extending the loan to the airlines ignoring its own internal report which has warned against such a move. The debt-laden airlines has stopped operations since October 2012.

“We have not received any communication and are unaware of any such inquiry,” Prakash Mirpuri, Vice President Corporate Communications of the UB Group, said while commenting on the development. CBI sources said the agency has registered 27 inquiries and cases with regards to bad loans given by Public Sector Banks to various corporates, the latest being two cases registered against Bhushan Steel and Prakash Industries where CMD of Syndicate Bank was allegedly bribed by these companies. The consortium of 17 banks had an outstanding of over Rs 7,000 crore on loans from Kingfisher with State Bank of India having the highest exposure of Rs 1,600 crore.

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