The Central Bureau of Investigation (CBI) on Wednesday arrested top officials from some leading PSU banks and public/private financial institutions. The agency alleged a big housing loan scam involving top officials of some financial institutions. It declined to put a figure to the size of the scam. The impact on individual banks will depend upon their total exposure to real estate lending.
Those arrested include Ramchandran Nair, Chief Executive Officer, LIC Housing Finance Ltd. ,Naresh K Chopta, Secretary (Investment), LIC, Mumbai; R.N.Tayal, General Manager, Bank of India, Mumbai; Maninder Singh Johar, Director (Chartered Accountant), Central Bank of India, New Delhi; Venkoba Gujjal, DGM, Punjab National Bank , New Delhi; Rajesh Sharma,Chairman & Managing Director and two other officials of a Mumbai-based private financial services company in a bribery case.
The CBI FIR states that the Central Bank staffer was asking for Rs 37 lakh bribe.
As per reports coming in CBI has named some big corporates in the scam. As per reports coming in at 7.30 p.m., corporates such as Adani, Religare, Suzlon, Pantaloon, DB Realty, BCG Group and J P Hydro are among the names mentioned in the FIR. More clarity is awaited on the names CBI has mentioned in its FIR.
Preliminary reports earlier in the afternoon also named Godrej Realty and Ashapura Minechem. Both these companies have denied any involvement.
CBI conducted raids in five cities and has arrested top officials of leading organizations. As per reports, the arrests included the CEO of LIC Housing Finance and the CMD of Money Matters. Senior officials from PNB, Bank of India and Central Bank of India have also been raided. An official from LIC has also been arrested by the CBI. Money Matters CEO and LIC HF's Nair have been remanded to custody till Nov 29.
The CBI said it had busted a racket in which Money Matters was "allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans." Raids were conducted at Mumbai, Jaipur, Delhi, Chennai and Jalandhar. CBI began investigation on Monday. Money Matters specialises in advising corporate clients on how to borrow money. The CBI has also closed all offices of Money Matters.
Earlier in the day, shares of LIC Housing Finance plunged 18.32 per cent to Rs 1068.55 on the BSE. It touched a low of Rs 1031.10 in trade. Shares of Central Bank of India also tanked on the same issue. The scrip fell 8.02 per cent to Rs 197.90 on the BSE. It touched a low of Rs 191.40 in trade.
Shares of Money Matters Financial Services also faced selling pressure. The scrip tanked 19.99 per cent to intraday low of Rs 531.20 on the BSE on rumours of a raid
Source: www.economictimes.com
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