Category: Excerpts

The Serious Fraud Investigation Office (SFIO) has received a complaint against Larsen & Toubro alleging “thousands of crores” of financial irregularities, including money laundering and tax evasion, a charge that the infrastructure giant rubbished as “baseless”. 

Acting on the complaint received, SFIO’s Mumbai regional office has written to the head-office here stating that it “is a fit case to be investigated” as it will “help in unearthing wrong doings of L&T group, in terms of misappropriation of money, money laundering and tax evasion”.

The government and the Reserve Bank of India (RBI) may have to step in to avoid an unprecedented event in Indian banking. Close to Rs 1,000 crore of Union Bank of India’s exposure on account of letters of undertakings (LoUs) issued by Punjab National Bank is due in the next few days. 

If the state-owned PNB does not pay back the amount by March 31, Union Bank (another government owned lender) will have to treat PNB as a defaulter in its books, provide for the loan, and even classify the amount as non-performing asset (NPA) if auditors insist. 

“It would be a peculiar situation because for the first time a bank would be technically described as defaulter,” a senior banker told ET. In the event of fraud, banks are required to make full and immediate provisioning against outstanding as well as categorise the loan as NPA. 

–from ET

As the probe into the alleged Rs 13,400-crore fraudulent LoUs at Punjab National Bank widens, the family of a chief executive officer (CEO) of a top private bank along with the CEO has come under the scanner of the government’s investigative agencies, sources have told The Indian Express.

Sources said that probe agencies are looking into the role of the bank CEO’s family in connection with loans given to Gitanjali Gems Ltd promoted by Mehul Choksi. This bank is part of a consortium of 31 banks that extended loans and guarantees of Rs 5,280 crore to Gitanjali Group.

Sources said agencies are probing the alleged role of the CEO’s spouse in getting the loans approved by the private bank for Gitanjali Gems. For securing these loans, sources said, a commission was allegedly charged by the spouse. Sources said agencies are planning to summon this CEO in the first week of April for questioning.

-from Indian Express