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Market Cap £1.40bn
Enterprise Value £2.87bn
Revenue £1.92bn
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Indian police probe suspected $90 mln loan fraud at IDBI

Thu 26th April, 2018 5:47pm
* Former IDBI bank executives under investigation by CBI
    * IDBI says police spoken to some senior bank officers
    * IDBI says one loan in probe became non-performing asset 

    MUMBAI, April 26 (Reuters) - India's federal police agency
said on Thursday it was investigating an alleged 6 billion rupee
($90 million) loan fraud at IDBI Bank  IDBI.NS , and former
senior bank officials were among those being investigated.
    Searches were being conducted at 50 locations, including New
Delhi and Mumbai, for evidence of fraud carried out through the
loan accounts of a company registered in the British Virgin
Islands and a Finnish firm, the Central Bureau of Investigation
said in a statement.
    The case registered relates to criminal conspiracy, breach
of trust by a public servant and cheating, according to the
statement from the CBI late on Thursday. 
    The bank said in a statement it had sought recovery of
assets from one borrower after it became a bad loan but it did
not provide any details of loans to the other company or name
the bank officials being questioned.
    It said the CBI had been examining certain documents
relating to that loan and had spoken to some senior officers. 
    According to the allegations, loans were granted to the
companies by IDBI Bank's senior management and independent
directors, who ignored existing guidelines and relaxed some of
the conditions, the CBI said.  
    "It is a case of alleged fraud on the bank by then
executives of the bank, then promoters of the group and the
companies involved," the CBI said.
    The alleged $90 million fraud, arose from losses resulting
from two loans, according to the CBI. The statement did not say
how much IDBI recovered from the borrowers.
    In 2014, according to the CBI, IDBI is accused of giving a
loan of $83 million to the company based in the British Virgin
Islands, Axcel Sunshine Ltd, which was used to pay off loans of
associate companies from the same group, violating Indian
regulatory guidelines. 
    The CBI also says IDBI gave the unnamed Finnish company a
loan equivalent to 52 million euros ($63 million) in 2010. The
firm was showing stress, and in 2013 it was granted voluntary
bankruptcy by a Finnish court.
    IDBI said in the statement late on Thursday it had given a
loan to Axcel Sunshine Ltd in February 2014, which became a
non-performing asset in December 2015. 
    "The loan has been fully provided for," IDBI said. "The bank
has initiated recovery actions to recover dues from the borrower
in August 2016."
    Reuters was unable to contact Axcel Sunshine as no website
could be found for the company. 
    India's Finance Ministry asked all banks to step up
vigilance following a $2 billion fraud in February at Punjab
National Bank  PNBK.NS , the country's second-biggest state-run
 ($1 = 66.7500 Indian rupees)
 ($1 = 0.8254 euros)

 (Reporting by Nigam Prusty in New Delhi and Abhirup Roy in
Mumbai; Editing by Simon Cameron-Moore and Alison Williams)
 ((; + 91 22 6180 7067; Reuters
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