Bank of Maharashtra shareholders stand by CEO; shares slide 2%

22 June, 2018, 10:14 | Author: Eric Barnett
  • DSK group cheating case Bank of Maharashtra CMD among 6 held

Bank of Maharashtra managing director and CEO Ravindra Marathe along with executive director RK Gupta has been arrested by the Economic Offences wing of the Pune police in connection with a Rs 3,000 crore loan default by DSK Group, The Economic Times reported.

"It is unfortunate that banks, which are otherwise fastidious about advancing loans to ordinary customers, should willfully flout norms while advancing loans to privileged customers like DSK", he further said.

In April this year, CBI booked former CMD of UCO Bank Arun Kaul in connection with an alleged Rs 621-crore loan fraud in which he purportedly facilitated loans to Era Engineering which were not utilised by the company for the sanctioned goal.

The arrests were made under sections 120 (B), 406, 409, 420, 465, 467, 468, 471, 109 r/w 34 IPC & 13 (1)(c) r/w 13 (2) of the PC Act.

According to the investigators, the bank executive and officials colluded with the DSK Group "with dishonest and fraudulent intentions to sanction and disburse the amount of the bank (BoM)" under the garb of loans and the money was later siphoned off.

Also arrested were Sunil Ghatpande, DSK's chartered accountant and Rajiv Newaskar, DSK Group's vice-president of the engineering department.

At least five FIRs across Pune, Mumbai and Kolhapur have been lodged against the developer and his family since October 28 a year ago, with more than 3,000 investors filing cheating complaints against Mr. Kulkarni.

In March, NSE and BSE had suspended trading of DS Kulkarni Developers Ltd shares following a directive from the National Company Law Tribunal (NCLT) in a case related to alleged diversion of funds.

BoM chief executive Ravindra Marathe and an executive director, Rajendra Gupta, were among six people arrested, police said. The Economic Offences wing has also arrested Sushil Munot, former CMD of the bank in this loan default case.

Bank of Maharashtra said in a statement, "Bank's total outstanding exposure to M/s D S Kulkarni Developers Limited is to the tune of Rs 94.52 crores which is fully secured by primary and collateral securities".

"Recovery process like SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act) action has already been initiated by the bank and some of the properties are due for auction", the bank said in a statement. However, bank officers Gupta, Deshpande and Muhnot illegally sanctioned a loan of Rs 100 crore to DSK and passed a separate resolution without the permission of the other banks, also immediately transferring Rs 50 crore towards the Dream City. The agency last month charged many including former IDBI Bank executives Kishor Kharat, now CEO of Indian Bank, and Melwyn Rego, the CEO of Syndicate Bank, in connection with IDBI Bank's Rs 600 crore loan to entrepreneur C Sivasankaran's firm.


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