Bank Of Maharashtra CMD arrested in Rs 3000 cr fake loans case

Marco Green
June 22, 2018

The DSK group had raised ₹2,892 crore in bank loans against his pending projects, ₹1,153 crore from the depositors and ₹470 crore from homebuyers among other borrowings without possessing the wherewithal to repay this massive credit.

Economic offence wing (EOW) of Pune police today arrested chairman and managing director (CMD) of Bank of Maharashtra and five others including past chairman of the bank in connection with a fraud case involving prominent builder DS Kulkarni.

"Bank officers colluded with DSK Developers by misusing their power and authority with dishonest and fraudulent intention to sanction and disburse the loan which was siphoned off", the Pune EoW said in a statement.

The bank's present MD & CEO, Executive Director R K Gupta, Zonal Manager Nityanand Deshpande, the bank's former CMD Sushil Muhnot, Kulkarni's CA Sunil Ghatpande, and Vice-President Rajiv Newaskar of the engineering department of Kulkarni's firm, D S Kulkarni Developers (DSKDL), were arrested.

According to the ET report, the bank officials allegedly colluded with the DSK Group by entering into fraudulent transactions and sanctioned loans which later became a non-performing asset.

Marathe was appointed as the MD and Chief Executive Officer of the bank in September 2016, while Gupta was appointed as the executive director of the bank in December 2013.

All the arrested accused have been charged under various provisions of the Prevention of Corruption Act and other laws pertaining to cheating, forgery, criminal conspiracy and breach of trust.

"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. Nonetheless, the defense lawyer argued that the loans were sanctioned after due diligence and it is unfair to say that the bank officials had misused their position.

Bank of Maharashtra claims its total outstanding exposure to DSK Developers is about Rs 94.52 crore which is fully secured by primary and collateral securities.

The bank has already declared M/s DSK Developers and its promoters as wilful defaulters.

BANK CRACKDOWN Police and investigating agencies have been cracking down on current and former officials of various public sector banks in connection with loans that have gone bad.

In further development, a Pune court granted seven days police custody to Marathe, Gupta, chartered accountant Ghatpande and Newaskar.

In May this year, the Maharashtra government had issued a notification directing authorities to attach 124 properties, 276 bank accounts and 46 vehicles belonging to the DSK Group on grounds of protecting the interests of the investors as Mr. Kulkarni was "unlikely to return their deposits".

Other reports by Click Lancashire

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