P. 1
lic scam

lic scam

|Views: 50|Likes:
Published by Sneha Sonawane

More info:

Published by: Sneha Sonawane on Mar 27, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less

12/07/2011

pdf

text

original

MUMBAI/NEW DELHI: In a crahttp://www.karmayog.com/ngoarea/navimumbai.

htmckdown on a multi-crore kickbacks-for-loan scam and trading insider information on companies, the CBI on Wednesday arrested the CEO of LIC Housing Finance, Ramachandran Nair, and seven others including three senior executives of public sector banks and a LIC executive. Nair and bankers - Bank of India general manager R N Tayal, Maninder Singh Johar, a chartered accountant and part-time director on the board of Central Bank of India, and Punjab National Bank deputy general manager Venkoba Gujjal - have been accused of pushing loans to companies in return for monetary benefits from executives of Money Matters, a Mumbai-based financial services company. In the remand application, CBI mentioned that the bank officials and Money Matters executives were working in tandem to provide loans and other bank facilities to real estate players such as DB Realty, Mantri Realty, Lavasa, 'Emaar MGH', the Jaypee group, the Krishna group, the Gold Souk project and Suzlon, among others. Rajesh Sharma, the head of Money Matters, and two of his colleagues - Suresh Gattani and Sanjay Sharma - were among those arrested. LIC Secretary (Investment) Naresh K Chopra, also held, has been accused of passing on insider information on several companies to Sharma. Among others, Chopra allegedly passed on information on Adani, Jaypee Hydro, JSW Power, Religare, DB Realty and Pantaloon. A special CBI court remanded the eight persons to police custody till November 29. Officials said more bank executives were being questioned as part of a nationwide probe into the multi-crore scam. Joint director of CBI in-charge of economic offences, K Kandaswamy, said the bank officials are yet to quantify the scam amount but officials pegged it at over Rs 1,000 crore. The CBI has been investigating the case for over a year and recorded conversations between the accused demanding kickbacks. Nair is alleged to have received funds to purchase a flat at a discounted rate at Satellite Towers, Goregaon (East) and also received Rs 45 lakh bribe. LIC's Chopra is accused of receiving Rs 16 lakh from Rajesh Sharma through his associates for providing insider information on several companies. The remand application also mentioned favours shown to Lavasa - a private township project undertaken by HCC Ltd near Pune. Johar allegedly demanded Rs 37.5 lakh from Sanjay Sharma and Rs 30 lakh was deliverd for the undue favour he extended for arranging loans for the Lavasa project.

* Venkoba Gujal was paid Rs 7. How they dealt with the bank or whether they gave gratification.5%.indiatimes. There was no hanky panky. There was no undue advantage given to us." Read more: CBI arrests LIC officials. said.com/india/CBI-arrests-LIC- . we don't know. * Incriminating documents. * Following the raids. chairman of DB Realty. the sanction came in January 2010 and the amount was disbursed in March 2010 with a rate of interest fixed at 13. Rs 200 crore power project of BGR Energy and Rs 300 crore power project of OPG. we decided to hire Money Matters to arrange for this loan amounting to Rs 200 crore. "We paid Money Matter's fee by cheque. bankers in multi-crore housing scam The Times of India http://timesofindia. it said the loans were secured by assets and were in line with regulatory norms. 28 hard disks. gift vourchers of Rs 4. 189 gold coins. Since my staff was busy with the IPO. * DB Realty and LIC Housing Finance on Wednesday said they were not involved in the multi-crore kickbacks-for-loan scam. * R N Tayal allegedly received Rs 25 lakh from Rajesh Sharma for purchase of a flat in New Delhi. These were all construction loans. * In a separate statement. the finance ministry said it had called for details from financial institutions. In addition. * Vinod Goenka. DB agreed to pay a 1. LIC Housing Finance said all procedures and due diligence consistent with board-approved guidelines were adhered to while approving the loans. "We were busy preparing for our IPO a year ago. Tayal had promised to help him in the matter of Ashapura Minechem." * He added.25% fee to Money Matters to get the loan sanction from any financial institution or bank and synidicate this loan for us.12 lakh were seized from the office of Money Matters at New Marine Lines. The application for the loan was made in November 2009 to LIC Housing. In another raid carried out by the income tax department on Tuesday.5 lakh as reward for facilitating a loan of Rs 50 crore to one of the clients of Rajesh Sharma. the department seized Rs 1 crore in cash. At the same time we wanted to submit loans for four projects in Mumbai.97 lah and Rs 12.Kandaswamy said CBI has registered five separate cases and will have to scrutinise over a lakh transactions before coming to a conclusion on the involvement of others.

November 24. its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans. So bribing officials for quick and huge loans is an easy option. LIC and LIC Housing Finance Ltd were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions. overriding mandatory conditions for such approvals along with other irregularities.µ said the CBI." said HDFC chairman Deepak Parekh. Director (Chartered Accountant) of Central Bank of India.cms#ixzz1CzZWAoHX 2nd Loan scam: CBI arrests top govt officials NDTV Correspondent. Secretary (Investment). Chairman and Managing Director of Mumbai-based firm Money Matters Ltd and two of its employees ² Suresh Gattani and Sanjay Sharma ² were among those arrested. Venkoba Gujjal and Deputy General Manager of Punjab National Bank (Delhi).ndtv. CBI said.(Also read: Late selloff hits stocks. Shares of LIC Housing dropped by Rs. Read more at: http://profit. They were also gathering confidential business information from financial institutions. ´A private financial services company. LIC. realty stocks tank) The officials allegedly colluded with the firm to sanction large scale corporate loans." CBI spokesman R K Gaur said in a statement. those arrested are Naresh K Chopra.officials-bankers-in-multi-crore-housingscam/articleshow/6983231. or 18. 239.068. (Read: The CBI statement) Rajesh Sharma. 1. Apart from Nair. Land prices in urban areas have sky-rocketed and developers need large sum to buy them. Maninder Singh Johar.com/news/show/home-loan-scam-cbi-arrests-lic-housing-ceo124034?cp . Bank of India. 2010 The CBI on Wednesday arrested CEO of LIC Housing Finance Ramachandran Nair and seven others including three top officials of public sector banks whose executives gave loans to private builders in exchange for bribes. Central Bank of India. General Manager of Bank of India (Delhi).55.32 per cent. R N Tayal. the spokesman said. The CBI has registered five separate cases in this regard and investigation is in progress. "These are clear cases of bribery and corruption by people working in the public sector. Punjab National Bank. on Wednesday to close at Rs. (Also read: Loan scam: Banking. Sensex falls 231 points) "Officers of top management and middle management of various public sector banks and financial institutions viz.

The official was responding to a query on the possibility of the Finance Ministry instituting an inquiry to look into the housing finance racket. according to senior banker and HDFC chairman Deepak Parekh. R N Tayal. The CBI earlier said that it had busted a racket wherein "a private financial services company. Maninder Singh Johar. Venkoba Gujjal and Dy General Manager of Punjab National Bank (Delhi). Rajesh Sharma. he said. Apart from Nair. The bank officials allegedly colluded with the firm to sanction large scale corporate loans. by people working in public sector organisations and facilitating and sanctioning loans by taking money". Director (Chartered Accountant) of Central Bank of India. reveals bribery and corruption by public officials in sanctioning home loans. Parekh said. overriding mandatory conditions for such approvals along with other irregularities. Bribery by public officials. "They (CBI) have zeroed in real estate sector and certain developers who must have paid money to get loans sanctioned". Otherwise banks at individual levels will set up inquiries" a senior official said here. we will set up inquiry. the investigating agency said. "If there is provision (of departmental inquiry)." Searches were conducted at various locations in Mumbai.Suresh Gattani and Sanjay Sharma-. CMD of Mumbai-based firm Money Matters Ltd and two of its employees -. CBI arrested CEO of LIC Housing Finance Ramachandran Nair and seven others senior bankers in connection with a housing finance racket. These arrests. . its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans. Chennai. Jaipur. those arrested are Naresh K Chopra. Secretary (Investment).3rd New Delhi: The economic offences wing of the Central Bureau of Investigation on Wednesday unearthed a major fake housing loan racket and arrested eight officials from various banks on graft charges. LIC. which have resulted in seizure of incriminating documents. The Finance Ministry said it would explore the possibility of instituting a departmental inquiry into the housing finance racket that led to arrest of senior officials of the LIC Housing Finance and public sector banks. The agency said it registered five separate cases and that investigations were in progress. These are cases of corruption.were among those arrested. General Manager of Bank of India (Delhi). Kolkata and Jalandhar. Delhi. "These are cases of bribery.

The insurer convened an urgent board meeting to take stock of the situation after arrest of Ramachandran Nair. Our asset quality has not been impaired. S. it will not have any impact on the asset quality of the banks. Vijayan said he had already briefed the government about the latest developments within the company.´ Mr. LIC Secretary (Investment) on charges of involvement in the loan bribery case. Chennai." says Deepak Parekh. who is the senior most general manager at LIC Housing Finance. the official said. LIC Chairman T. "We have inquired from individual banks about the asset quality and banks have said there will not be any increase in NPAs (Non-Performing Assets) due to this episode".380 crore. Chandrasekhar. So should the consumers be worried? "No. Mr. Jaipur. which have resulted in seizure of incriminating documents.Chopra. he said.com/news/housing-loan-scam-top-lic-bank-officials-held/135758-3. Kolkata and Jalandhar. Vijayan said ³we are trying to have an internal enquiry into this matter. Asserting that there was no systemic failure in the company. . Searches were conducted at various locations in Mumbai.Describing the episode of arrests of bankers as incident of "bribery". with LIC housing stocks plunging by 20%.´ The outstanding to the contentious real estate companies from LIC Housing Finance was Rs. the official said. On Wednesday. Vijayan said after the board meeting. will be the officiating CEO of LIC Housing Finance. the investigating agency said. CEO of its housing finance entity. The agency said it registered five separate cases and that investigations were in progress. while asserting that its assets were not impaired by the housing finance scam involving some of its top officials. adding that he would be assisted by two other general managers. (With PTI inputs) http://ibnlive. and LIC was providing all the relevant information to the Central Bureau of India for its investigation into the scam.html video link LIC Housing exposure in scam is Rs.in." News of the raids took housing finance stocks down. and Naresh K. the CBI arrested eight top officials from banks and financial firms on charges of taking bribes to grant corporate loans. Delhi. "there's no impact on retail loans. Officiating CEO ³Mr.380 crore MUMBAI: The Life Insurance Corporation of India on Thursday initiated an exercise to check its risk management system.

registered five cases and arrested LIC Housing Finance CEO Ramchandra Nair. The accused were also engaged in gathering confidential business information from financial institutions.Sanjay Sharma and Suresh Gattani were also arrested. General Manager of Bank of India (Delhi). on November 24 last year. Rajesh. All the four have been booked under various sections of IPC for conspiracy and fraud. Secretary (Investment) LIC. Sanjay and Gattani. ² PTI CBI files chargesheet in LIC scam against Sharma. the Chairman of the firm 'Money Matters'. Rajesh Sharma and two other employees of Money Matters . CBI is likely to file chargesheets in the other four cases soon. the agency said.. And will be appointed in the next 2-3 days. Johar received Rs 30 lakh from Money Matters for providing undue favours to M/s Lavasa. 0 Comments email print CBI on Monday filed its first chargesheet in one of the cases registered in the multi-crore kickbacks-for-loans scam against Maninder Singh Johar. Loan scam: LIC likely to suspend arrested officers pending probe NDTV Correspondent. January 31. others Press Trust Of India Mumbai. Director of Central Bank of India.´ he added. Venkoba Gujjal.³The process of finalising a new CEO is on. The agency contends that officials of the LIC and the banks colluded with Sharma's firm to sanction large loans to housing firms. and three others including alleged kingpin Rajesh Sharma. The agency today filed chargesheet before a special CBI court here against Johar. 2011 First Published: 20:09 IST(31/1/2011) Last Updated: 20:11 IST(31/1/2011) share more. According to CBI. Naresh Chopra. R N Tayal. overriding mandatory pre-conditions. a former director of Central Bank of India. CBI.. 2010 09:52 IST . Deputy GM of Punjab National Bank (Delhi). Updated: November 25. and also under the Prevention of Corruption Act. Maninder Singh Johar.

ndtv. General Manager of Bank of India.Read more at: http://www. LIC had said. Deputy General Manager of Punjab National Bank. The bank officials are also accused of selling confidential information. In another case. Bribery by public officials. "All procedures and approved guidelines were adhered to in approving the loans. And they have zeroed in on real-estate sector and certain developers who must have paid money to get loans sanctioned. They were also gathering confidential business information from financial institutions. mainly real estate companies. Among them: Ramchandran Nair. Steps will be taken to protect interests of various stakeholders. the Chief Executive Officer (CEO) of LIC Housing Finance. The private company involved is Money Matters. bribing officials at public sector banks to get loans worth crores sanctioned for private firms. All loans have been secured by underlying assets to the satisfaction of approving authority." the CBI had said. the LIC is likely to suspend them pending probe. Chopra allegedly traded confidential information on LIC investments into the Adani Group.com/article/india/loan-scam-lic-likely-to-suspendarrested-officers-pending-probe-68465?cp New Delhi: After two of its top officers were arrested by the Central Bureau of Investigation (CBI) for allegedly sanctioning loans in return for bribes. by people working in public sector organisations. In a statement released after the arrests on Wednesday. and Venkoba Gujjal . (Read: Top bank managers arrested for loans-for-bribes scam) "A private financial services company. The government has sought to play down the episode. and facilitating and sanctioning loans by taking money. Sources in LIC have told NDTV that the frauds were committed in the officers' own capacity.'' said Deepak Parekh. Naresh Chopra of LIC Mumbai has been accused of receiving Rs." ''These are cases of bribery. The LIC board will meet on the issue soon. LIC's Vigilance arm is also investigating the case independently. including Chairman and Managing Director Rajesh Sharma have been arrested. Meanwhile. 16 lakhs from Money Matters' Rajesh Sharma. and three of its senior-most officials. RN Tayal . Speaking about the finance . and no norms were violated. These are cases of corruption. its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans. The men at Money Matters allegedly acted as middlemen. A total of eight people have been arrested by the CBI. the chairman of HDFC Bank.

Venkoba Gujjal. Tayal allegedly assured him of two loans worth Rs. 2011 First Published: 20:09 IST(31/1/2011) Last Updated: 20:11 IST(31/1/2011) share more. "It's a case of individual greed not a systematic failure. on November 24 last year. others Press Trust Of India Mumbai." he added.. In return. 25-lakh bribe to RN Tayal at the Bank of India.racket. Secretary (Investment) LIC.. "If you can't get a 300-crore project passed. The agency today filed chargesheet before a special CBI court here against Johar. the Chairman of the firm 'Money Matters'. Banking Secretary R Gopalan said it was a bribery case involving some individuals and not a large-scale scam. 0 Comments email print CBI on Monday filed its first chargesheet in one of the cases registered in the multi-crore kickbacks-for-loans scam against Maninder Singh Johar. Rajesh Sharma and two other employees of Money Matters . Deputy GM of Punjab National Bank (Delhi). R N Tayal. (Watch) The arrests came after a CBI investigation that covered five cities and lasted over a year. Rajesh. All the four have been booked under various sections of IPC for conspiracy and fraud. 500 crore for two different companies. The CBI charges that Rajesh Sharma of Money Matters paid a Rs.Sanjay Sharma and Suresh Gattani were also arrested.. CBI files chargesheet in LIC scam against Sharma. . what is the use of you being in this position?" asks Sharma brazenly. Director of Central Bank of India. Sanjay and Gattani. January 31. and also under the Prevention of Corruption Act. a former director of Central Bank of India. Maninder Singh Johar. Naresh Chopra. General Manager of Bank of India (Delhi). and three others including alleged kingpin Rajesh Sharma. Taped conversations referred to in the CBI's First Information Report (FIR) revealed incriminating details.. registered five cases and arrested LIC Housing Finance CEO Ramchandra Nair. CBI.

The accused were also engaged in gathering confidential business information from financial institutions. Mahinder Singh Johar (Director. General Managers of Bank of India and Central Bank of India (New Delhi) and CGM of Punjab National Bank. Mumbai). PSB officials Published on Wed. Naresh K Chopra (Secretary. . Reports suggest that the CBI has arrested Ramchandranan Nair (CEO. Mumbai). Johar received Rs 30 lakh from Money Matters for providing undue favours to M/s Lavasa. Nov 24. The agency contends that officials of the LIC and the banks colluded with Sharma's firm to sanction large loans to housing firms. Central Bank of India. Nov 24. the agency said. LIC Housing Finance Ltd.According to CBI. 2010 at 16:11 | Updated at Wed. Suresh Gattani and Sanjay Sharma of M/S Money Matters. The LIC secretary (investments Mumbai) too has also been arrested on bribery charges. Excerpts from After the Bell on CNBC-TV18 Watch the full show » ALSO READ See latest News about LIC Housing Fin See previous management interviews See what other Experts & Brokerages are saying about LIC Housing Fin The CBI also said officials of Money Matters have been arrested for broking bribery deals. LIC Mumbai). Punjab National Bank. CBI's EOW chief P Kandaswamy said the agency has busted a housing loan scandal racket and arrested CEO of LIC Housing. R N Tayal (General Manager. and Rajesh Sharma. overriding mandatory pre-conditions. EMI & Eligibility Compare 59 banks before you apply Apnaloan. Bank of India. Several other bank officials have also been arrested on bribery charges. Bribery scam: CBI arrests LIC Hsg CEO. New Delhi). New Delhi). The CBI said classified business information was also given out for favours.com/Home-Loans The CBI on Wednesday addressed a press conference regarding arrests of eight officials of public sector banks and financial companies. Investment. Venkoba Gujjal (DGM. 2010 at 21:28 | Source : CNBC-TV18 Email Print Video Share47 Ads by Google LIC Housing Finance Interest Rates. Speaking to the press. CBI is likely to file chargesheets in the other four cases soon.

Loan scam: This is individual misconduct.were individuals at a fairly high post and probably had powers to influence decision making of the entire organization. in an interview with ET Now talks about the loan bribery scam involving LIC Housing Finance and gives his views on it. LIC. Some of the individuals named in LIC Housing Finance . it was a bit of surprise for us and allegations are about individual misconduct. in an interview with ET Now talks about the loan bribery scam involving LIC Housing Finance and gives his views on it. Lic scam Loan scam: This is individual misconduct. Chairman. What was you initial reaction to what has come about? Did it come as a bit of a surprise to you as well? Yes.¶ All the eight arrested will be in CBI custody for five days. LIC HFL has not lost money says TS Vijayan. whose identity was not disclosed.or even in the other companies . LIC HFL has not lost money says TS Vijayan. talks of LIC Housing Finance being involved in a multi-crore scam surfaced sending realty and banking stocks spiralling down. Do you think it is a one of case of rotten egg or could there be more? . The CBI. LIC 26th November. Chairman. which was said to be questioning a slew of people involved in the scam. CBI has said that 5 FIRs have been registered under prevention of Corruption Act. included officials from LIC Housing. LIC. We are taking proper action. Chairman. CBI has clarified that though realty companies are named in the FIR but it is µnot as accused. that is it. LIC The Economic Times TS Vijayan. Central Bank of India and a real estate developer.Shortly before the stock markets shut trade for the day. Meanwhile. 2010 Source: The Economic Times TS Vijayan. Chairman.

It is a proper performing asset. I have not seen entities· names. So we do not think there is anything wrong in it. naturally regulator will check up whether there is some problem. Till that time we have created a committee of general managers there to look into all these issues.about 11% and NPAs are very small. Do you think that is a possibility at all? . That process will be completed as early as possible. We have to take action as per the staff regulations and we will be doing as early as possible and obviously if something happens.would become a lot more cautious when they are lending loans to the real estate companies.I think it is one off case. That is natural. A lot of market participants have expressed fears that how a lot of central bankers . A peculiar thing is the kind of or the lack of numbers that have come out with regards to the overall exposure that any of these individual entities have. Do you believe that there would be increased or enhanced inquiring. Such a case is not there. Could you also give us a little clarity with respect to succession plans for Mr RR Nair? Mr RR Nair is in the rolls of LIC and he is governed by the staff regulations of LIC. whether risk management the efforts can be taken. We looked into our project loans which are a very small portion of the overall thing in the LIC Housing Finance . we will be able to respond to that in terms of how much is their exposure to that. Would you have a sense of how much would LIC Housing Finance as an institution would be having? The entities· name has not come off.have been following? Regulators sort of keep on investigating any of such things. But I do not think that overall there is any systemic failure or any asset qualities impaired or any procedures have not been followed. as early as next week itself.or banks in particular . I agree that CEO of LIC HFL is in a senior position and he is a person who puts up the note to execute a committee for taking decisions. If entity name is coming up.particularly in the PSU banking space or lending agencies . we will have to bring out there new person in place of Mr RR Nair. If a new story comes like this. what is the amount as portion. red flags from the market regulator as well with regards to some of the practices that the lending agencies .

Absolutely nothing. Probably at that time we will have more clarity on it. If you look at. I will disagree with you to call this is a scam. This indicates that there is no loss to the company. I do not think there is anything to fear on that. Our exposure to this wholesale loan .if I can use that term . I would not agree with the term scam being used for such a thing.and the part of those individual people in terms of landing out the loans to the corporates. as portion to real estate is subject to so many controls and so many checks at various level. Are you categorically saying that there have been no malpractices as far as the lending of money to any of the institutions is concerned? No. In spite of the fact that these practices were being followed even now.If it·s an individual misconduct.I will call it a wholesale loan or project loans ² is hardly 11% of the total thing and 89% is going to retail. then there will be loss to the company and overall loss.8% gross NPA. I am sure there has to be some reason why the CBI did what it did. .0. After all. If it is a scam. There has to be a reason why the CBI has done what it has done and it has to be some malpractice . this scam has indeed happened. isn·t it? I will wait for the completion of the investigations and the charge sheet to make a judgment on that. no company has loss and this LIC HFL has not lost money on that and the NPAs level is extremely good . That will continue I suppose. I can assure you and assure the investors that there is no extraordinary chance of anything becoming NPA in the end. But let me see what allegations charge sheet coming up. This is individual misconduct or as CBI says it is it guilt gratification for individual. Even though the overall exposure would be small and the NPA levels have not risen till now. do you think that any of that amount could become a potential NPA because there has been some bit of a lack of proper practices while going ahead with these loans? I wish to tell you that there is no loss of proper practices in lending to these companies. nothing. out of the total exposure that LIC Housing Finance as an institution to real estate companies. due diligence is slightly more when loan is given to the real estate companies.

A presentation on Money Matters· website says it has placed $9. is also one of its top clients.Money Matters' Sharma moved up fast in shadowy world of bonds The Economic Times MUMBAI: Those who know him say Rajesh Sharma began his career in the financial market from a hole-in-the-wall office at Fort in the late 90s. unlike equity. Mr Sharma·s expertise in those days was to find buyers for large blocks of shares of mid. LIC. In 2001-02. promoted by Mr Sharma. specialised in helping firms raise money through debt is-sues. Mr Bansal parted ways with Mr Sharma to set up his own firm. a prerequisite for anybody looking to broker equity deals. The loan and bond market. Talk is that this official convinced some of his high net worth and retail clients to buy the shares that Mr Sharma was looking to offload. the parent of LIC Housing . un-heard of brokers which have hogged the debt syndication league table. there has been a dramatic growth of little known. and counts the Adanis. In recent years. joined it. He is said to have been well-networked with important fund managers. It became a big player in the bond market after Pawan Bansal. a non-banking financial company. HCC and Indiabulls among its key clients. the Tatas. Altius Finserv. Later.and small-sized companies. a former Axis Bank official and an old hand in the fixed income segment. Money Matters is one such firm. A chartered accountant by profession.5 billion of debt in the past two years. provident funds and banks . Yet. Reliance ADAG. Some of the intermediaries are also involved in placing corporate bonds to domestic institutional investors like insurance firms. Money Matters. is a more shadowy world. Mr Sharma is said to have befriended an official at a retail broking house which was then just beginning to spread its wings.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->