India’s apex investigating agency the CBI has booked Jagdish Khattar, the former managing director (MD) of Maruti Suzuki India Limited (MSIL), in connection with a $15.4 million bank loan fraud allegedly committed by his new company Carnation Auto India Limited, an official said on Tuesday.
Carnation Auto India Limited was established as a car servicing and repair outlet of various brands. It also dealt in the sale and purchase of second-hand vehicles.
The CBI has registered a case under sections related to criminal conspiracy and cheating following a complaint by the state-run Punjab National Bank (PNB) after Khattar failed to repay the same.
According to the official complaint, the probe agency has named Mr Khattar and his new company Carnation Auto India Limited for allegedly causing losses to the state-run PNB.
Khattar was with Maruti Suzuki India Limited from 1993 to 2007 and retired as managing director. “Following his (Khattar’s) retirement, he had launched his own company -- Carnation -- for which he got a loan of $23.9 million sanctioned in 2009. The loan was declared non-performing asset (bad debt) in 2015 with effect from 2012”, the police complaint (FIR) revealed.
The agency also said the borrowers sold the goods hypothecated to the bank without its permission and diverted the funds, thereby causing criminal breach of trust and cheating, resulting in wrongful loss to the bank and corresponding gain to themselves.
The FIR stated that the bank had conducted a forensic audit which showed that fixed assets to the tune of $9 million were sold for a consideration amount of $0.63 million without its approval.
“The sale proceeds were not deposited with the (Punjab National) bank and Khattar had dishonestly and fraudulently extended loans and advances to its sister subsidiaries. Thereby it has committed misappropriation of bank funds and has put them for own use", the agency said.
“An investigation had been launched to look into the matter. A look-out circular against Khattar has not yet been issued”, the probe agency CBI said.
Meanwhile, citing CBI sources, the India News Agency (ANI) on Tuesday evening reported: “Searches were conducted yesterday (Monday) at company's (Carnation Auto India) office in Delhi, residence in Noida and at a Chartered Accountant's residence. Have recovered documents related to the case and it's being scrutinised".
However, when contacted, Khattar said that he has always made himself available and will continue to fully cooperate with all the agencies.
"The claims being made were examined in great detail during the forensic audit and we provided satisfactory replies on each. We were cleared in the forensic audit on each count. I have no doubt we will be vindicated again once the investigation is completed”, Khattar said.
