NEW DELHI/MUMBAI Aug 9 India's top crime
fighting agency is investigating a loan made by state-run IDBI
Bank Ltd to debt-laden Kingfisher Airlines
worth 9.5 billion rupees ($155.38 million), a police spokeswoman
said on Saturday.
The Central Bureau of Investigation (CBI) is looking into
why the loan was approved when the airline has a negative net
worth and a negative credit rating, Kanchan Prasad said.
"The CBI has registered a preliminary inquiry to inquire
into the role of IDBI and Kingfisher Airlines," she said.
"There was no need for the bank to take the exposure outside
the consortium when already other banks' loans were getting
A preliminary inquiry is usually the first step before a
formal case is filed.
Kingfisher Airlines, controlled by liquor baron Vijay
Mallya, has not flown in almost two years and owes about $1
billion to a consortium of mostly state-run banks, and hundreds
of millions of dollars more to airports, tax authorities and
IDBI did not respond to requests for comment.
Prakash Mirpuri, a spokesman for UB Group, Kingfisher's
controlling shareholder, said: "We have not received any
communication and are unaware of any such inquiry."
Two-thirds of India's bank assets are controlled by
state-run banks, which in turn account for three-quarters of the
sector's bad loans.
Last week, CBI arrested Sudhir Kumar Jain, the chairman of
state-run Syndicate Bank Ltd over allegations that he
was seeking bribes to favour debtors.
(1 US dollar = 61.1400 Indian rupee)
(Reporting by Aditya Kalra in NEW DELHI and Himank Sharma in
MUMBAI; Additional reporting by Devidutta Tripathy and Tommy
Wilkes; Editing by Lynne O'Donnell)