Rs 600 Crore Loan Fraud Committed On IDBI Bank C Sivasankaran - CBI

5 May 2018: IDBI executives ignored all high risks involved after a previous loan, gave Siva loans investigated by the Central Bureau of Investigation and committed Rs 600-crore loan fraud by former Aircel promoter C Sivasankaran and provided a loan for “non-productive purpose”. IDBI’s top management transformed various conditions of the loan, including interest rates, its classification as ‘medium-term loan’, corporate guarantee and security proposed by Sivasankaran’s firm. 
 
CBI claimed that the former IDBI officials entered into an illegal conspiracy with promoters/directors of Siva Group of Companies to promote a loan amounting to Rs 523 crore to M/s Axcel Sunshine Limited, an associate company based in the British Virgin Islands. This loan was facilitated even though a loan worth Rs 323 crore given to Siva Group’s Win Wind Oy in 2010 had turned bad and the company had filed for bankruptcy in Finland. 
 
“The Rs 523 crore loan was given to Axcel in 2014 to use the same for repaying other loans of other associate companies of Siva Group in flagrant violation of the administrative guidelines,” says CBI. The company had offered 5.50 crore unlisted shares of Tata Tele Services Ltd (TTSL) valued at Rs 106 per share as security for the second loan and Rs 38 crore fixed property as guarantee along with the corporate guarantee of Siva Industries and Holdings Ltd. 
 
“The accused bank officials had gone out of their way to misuse their official position by violating all RBI guidelines and instructions to give public money to Siva Group by way of a loan for a non-productive purpose, and also, in a matter where the risks of recovery were very high, even going by the past experience they had had with the recent NPA relating to WWO loan account,” says CBI. 
 
The bank disbursed around Rs 445 crore out of Rs 523  crore, which was used by Siva to clear dues of his other companies. IDBI offered other favors to Siva’s companies. The bank disbursed three other loans worth around Rs 31 crore) to Siva’s company to repay the interests to IDBI, giving an impression that the loan account was in good condition.