CBI probes its ex-chief, 900cr loan to Mallya

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FC15111128Suddenly the Central Bureau of Investigations (CBI) has its hands full. It has to launch investigations against its own former director Ranjit Sinha and to launch proceedings against three former officials of the IDBI Bank in connection with 900-crore loan given to the fugitive Vijay Mallya.

The CBI has already arrested a former chairman and three other ex-officials of IDBI Bank along with four former executives of Kingfisher airlines in connection with the Mallya loan default case. Happening almost at the same time, the Supreme Court has directed the new chief of the CBI Alok Kumar Verma to lead a special investigation team (SIT) to launch a probe against former director Ranjit Sinha in the coal block allocation scam.

A three-judge bench presided over by Justice Madan B Lokur has noted that a “prima facie case has definitely been made out for investigation into the abuse of authority” by Sinha. The court relied upon an inquiry report submitted by former special director M L Sharma, who was given access to a visitors’ logbook, purportedly showing his meetings with several accused . The bench, also comprising Justices Kurian Joseph and A K Sikri, ordered Verma to pick two officers from the CBI and carry out a probe to ascertain whether Sinha’s meetings resulted in scuttling inquires, investigations and prosecutions being carried out by the agency in the court-monitored coal block allocation cases. Sharma, after carrying out an inquiry, submitted his report that indicted Sinha over his private conversations with the accused and favoured for a criminal investigation.

In a first such instance, the apex court had on May 14, 2015, held that it was “completely inappropriate” for Sinha (then CBI director) to have met persons accused in the coal block allocation cases in absence of the investigating officer. Sinha retired in November 2014, less than a fortnight after he was removed from the 2G probe by the apex court. “The CBI director will also take the Chief Vigilance Commissioner into confidence,” the court said, adding that Verma will take assistance of R S Cheema, special public prosecutor in the cases.

Change of guard

“Since there has been a change of guard in the CBI, we would continue to repose our faith in the impartiality of the CBI to look into the report prepared by M L Sharma and other relevant documents,” the bench said. The investigations would be for Sinha’s alleged involvement in the coal scam case, holding him prima facie guilty of abuse of authority for frequent meetings with some of the accused in the coal scam.

“Prima facie a case is made out against him for allegedly conniving with certain accused in coal scam” and the apex court asked  Alok Verma to probe with ‘due earnestness’ his predecessor for abuse of office. Significantly, it was just  three days after he took charge, the Supreme Court had handed new CBI director Alok Verma the difficult task of setting up an SIT to probe the agency’s controversial former chief Ranjit Sinha in connection with his alleged abuse of power and authority to save several accused in the sensational coal scam and influence investigations.

The SC said further investigation was required into Sinha’s “wholly inappropriate” meetings with several accused in the coal scam at his residence. The meetings were revealed by a visitor’s diary which was submitted to the court by lawyer Prashant Bhushan, to ascertain if it had any impact on the probe or helped the accused. On July 11, in a major setback to Sinha, an SC-appointed panel headed by former CBI special director ML Sharma told the apex court that prima facie it seems the former CBI director did try to influence probe in the coal scam. It also said the diary was genuine.
The bench asked Verma to indicate on the next date of hearing the composition of his team and the time required to complete investigations.

The apex court had last year reserved the order on the issue after Attorney General Mukul Rohatgi told the bench that the panel headed by former CBI special director M L Sharma held that Sinha’s meetings with some high- profile accused in the scam, prima facie indicated that there was an attempt to influence the investigation. Rohtagi, who had only received an initial report of the panel for perusal on condition of confidentiality, had said he had gone through the report which has found that the visitors’ diary at Sinha’s residence was genuine.

The apex court-appointed panel had been probing the alleged scuttling of probe in to coal block allocation scam cases by Sinha, whose meetings with the accused persons were held as “completely inappropriate”. On December 7, 2015, the court had ordered handing over the original visitors’ diary of the official residence of the former CBI director to the Sharma-led panel. The damaging conclusion provided ammunition to allegations that Sinha had frequent meetings with the prime accused “to scuttle inquiries”.

The Supreme Court has directed the new CBI chief Alok Verma to probe against former director Ranjit Sinha in the coal block allocation scam

Whistleblower

An anonymous whistleblower had leaked the logbook to advocate Prashant Bhushan, the civil rights lawyer who represented NGO Common Cause, which moved the court against the coal block allocations and the huge losses suffered due to skewed allocation.

Bhushan had passed on the logbook to the Supreme Court without revealing his source. Bhushan had alleged that the visitors’ log of 2013 and 2014 showed meetings, “several of them late at night, at his residence with several accused persons in prominent cases like Coal scam, 2G scam, and with Hawala operators…” The Sharma Committee, set up to conduct an independent enquiry into the veracity of the entries in the logbook and allegations against Sinha, had submitted its confidential report relating to alleged misconduct of Mr. Sinha in April this year.

Noose tightened

In the meanwhile, the CBI in the Kingfisher case, has 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 sources said.

The loan was allegedly sanctioned in violation of norms regarding credit limits. The sources said there was no need for the bank to take the exposure outside the consortium. “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,” a senior CBI official, probing the matter, had earlier said. It is learnt that 250 crore of loan 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 facing another CBI case which was filed on the basis of complaint from State Bank of India which is one of the lenders to the Kingfisher Airlines in connection with 1,600 crore of alleged default. The CBI said a case has been registered against Mallya and others after receiving a complaint from State Bank of India, which is leading a consortium of 17 banks that have given loans to Kingfisher Airlines.

The airline, owned by Mallya, had taken 6,900 crore from a consortium of 17 lenders in early 2010 after a second debt restructuring for the airline. Coming days would be significant to watch the CBI acting against its own former director and progress made in Kingfisher loan default case.

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