Former IDBI Bank Chairman Yogesh Agarwal Among 8 Arrested In Mallya Loan Default Case

The Central Bureau of Investigation (CBI) on Monday arrested a former chairman and three other ex-officials of IDBI Bank along with four former executives of Kingfisher airlines in connection with the Vijay Mallya loan default case. Those arrested include the then chairman of IDBI Bank Yogesh Aggarwal and former CFO of now-defunct Kingfisher Airlines A Raghunathan, CBI officials said on the condition of anonymity.

They said three more former executives of the airlines and three more former officials of IDBI Bank were also taken into custody.

The arrests were followed by searches at 11 places including Mallya's residence in New Delhi, three floors of UB towers in Bengaluru and residences of Aggarwal and Raghunathan among others. The UB Group issued a statement in Bengaluru confirming the visit of CBI team.

Other IDBI executives arrested by the CBI include OV Bundellu, SKV Srinivasan and RS Sridhar, the CBI officials quoted above said.

Besides the former CFO of Kingfisher Airlines, three more former executives of the defunct airline – Shailesh Borke, AC Shah and Amit Nadkarni – were also arrested, the officials added.

The arrests have been made from multiple cities. While Raghunathan was arrested in Mumbai, Aggarwal was taken into custody from Gurgaon, the sources said.

The CBI has alleged that Aggarwal approved the loans and also instructed to expedite the ratings while finalising the loans to Kingfisher Airlines of over Rs 900 crore. The agency has said that loans were issued by accepting Kingfisher brand as hypothecation, lease aircraft and guarantees from UB Group and Mallya himself.

During the probe, the CBI had come across alleged communication from Raghunathan to IDBI Bank in which he had referred to meetings between Mallya and Aggarwal. The agency is investigating if the loan disbursal took place after these meetings. The loan was allegedly sanctioned in violation of norms regarding credit limits.

There was no need for the bank to take the exposure outside the consortium, a senior CBI official probing the matter had said earlier. "It was first exposure to the bank. There was no need for the bank to take the exposure outside the consortium when already other loans were getting stressed.”

Rs 250 crore worth of loans given by IDBI Bank was allegedly routed through different bank accounts of Kingfisher Airlines which had stopped operations in 2012 following huge debts.

Mallya, who has moved to Europe last year, is also embroiled in another CBI case which was filed on the basis of complaint from State Bank of India (SBI) which is one of the lenders to the Kingfisher Airlines in connection with Rs 1,600 crore of alleged default.

The CBI said a case has been registered against Mallya and others after receiving a complaint from SBI, which is leading a consortium of 17 banks that have given loans to Kingfisher Airlines.

The airline, owned by Mallya, had taken Rs 6,900 crore from a consortium of 17 lenders in early 2010 after a second debt restructuring.

This story has been re-published with additional details.