Wednesday, February 01, 2017

IDBI brass brushed aside junior execs’ concerns on Kingfisher Airlines loans

Mumbai: IDBI Bank officials internally quarrelled over the approach to sanction fresh loans to Kingfisher AirlinesBSE 3.03 % as a bunch of executives insisted on collateral before signing off on the dotted line while the top management overruled the juniors and instead went with Kingfisher Airlines brand as a guarantee which did not even have legal backing, the CBI alleges.
The CBI chargesheet has alleged that despite junior staff in IDBI Bank seeking shares as collateral for the Rs 750-crore loans, the then head of corporate loans BK Batra ‘struck off ’ the portion in the loan proposal document. The junior staff insisted on unencumbered shares as security.
"The intangible asset was accepted as a security by the accused officers. On the other hand, the efforts made by the lower level of officials for seeking collateral securities through pledge of unencumbered shares of the company was discarded and the loan was sanctioned without adequate securities,” the CBI chargesheet says.

The CBI claims that it is in possession of documents in which Batra wrote: “No pledge. Consequential changes to be made”, and then signed the documents so that changes could be incorporated before the proposal was presented to the executive committee.
01/02/17 Saloni Shukla/Economic Times