business

Updated: Oct 10, 2015 22:24 IST

The Central Bureau of Investigation (CBI) searched liquor baron Vijay Mallya’s home and offices on Saturday in connection with a probe into an alleged default of a massive loan by IDBI Bank to his now defunct Kingfisher Airlines.

The investigative agency filed an FIR against Mallya, former Kingfisher Airlines chief financial officer A Raghunathan and other unknown officials of Mumbai-based IDBI for causing a loss of Rs 900 crore to the public sector bank. An agency source said IDBI gave the loan despite Kingfisher Airlines’ negative credit ratings and financial troubles.

“CBI officials had visited UB Group premises in Bangalore, Goa and Mumbai in the course of an investigation regarding a loan facility availed by Kingfisher Airlines,” a UB Group spokesperson said. “The company co-operated with the officials and provided the necessary documents and will continue to offer co-operations.”

The source said the agency found “several probe-related incriminating documents” during the searches in Mumbai, Bangalore and Goa that are being scrutinised.

“The probe will examine allegations that officials of IDBI had colluded with the promoters and directors and then CFO of the said airlines and sanctioned credit limits of around Rs 900 crore in violation of banking norms. It thereby caused a loss to the said bank by such a fraudulent act,” a CBI spokesperson said.

The FIR was registered under sections pertaining to criminal conspiracy, criminal breach of trust by a public servant or a banker, merchant or agent, and criminal misconduct by a public servant. The agency is likely to examine people named in the FIR -- including Mallya, and a few senior IDBI officials – soon as part of its probe.

The CBI registered a preliminary enquiry in the case around a year ago to examine the alleged bad loan. The agency will ask the bank to explain why it gave the loan to the airline, ignoring its own internal report that had allegedly warned against such a step. The debt-laden airlines stopped operations in October 2012.

The enquiry was part of a wider probe by the CBI to examine alleged bad loans given by public sector banks to various companies in violation of banking rules, said the source.

(With inputs from Bangalore)