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Market Cap £1.25bn
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UPDATE 1-Indian police probe suspected $90 million loan fraud at IDBI Bank

Thu 26th April, 2018 7:16pm
* 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 

 (Adds further details)
    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.
    Police officials said as many as 15 senior IDBI officials,
including former chairman and managing director M S Raghavan,
former deputy managing director M O Rego, and former chief
executive officer Kishor Kharat, were under investigation, as
well as the companies that took the loans and nearly two dozen
other individuals.
    Raghavan, IDBI's former chairman, told Reuters he could not
comment as he had not been informed of the developments.
    Rego is currently the chief executive of Syndicate Bank Ltd
 SBNK.NS  and Kharat is now the CEO of Indian Bank  INBA.NS . 
Reuters calls to both men's cell phones went unanswered. Reuters
sent emails to Syndicate Bank and Indian Bank seeking comment,
but there was no immediate response as it was outside business
    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
(CBI) 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. 
    IDBI said in a statement it had sought recovery of assets
from the BVI-registered borrower after it became a bad loan. The
bank said that the CBI had been examining certain documents
relating to the loan and had spoken to some senior officers.
    But it did not provide any details of loans to the other
company or name the bank officials being questioned.
    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, 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, a BVI-registered company, in
February 2014, which became a non-performing asset in December
    "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, Alison Williams and Alex
 ((; + 91 22 6180 7067; Reuters
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