KFA: More bankers to land in CBI net

The move comes after Raghunathan and UB Group CFO Ravi Nedungadi disclosed details of transactions between banks and the airline

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The Central Bureau of Investigation (CBI) is set to file cases against senior executives of three or four public sector banks, that were part of the lending consortium for Kingfisher Airlines (KFA).

This is apart from the case registered in December against five serving and retired IDBI Bank executives; A Raghunathan, former chief financial officer of Kingfisher Airlines; and United Breweries (UB) Group Chairman Vijay Mallya.

The move comes after Raghunathan and UB Group Chief Financial Officer (CFO) Ravi Nedungadi disclosed details of transactions between banks and the airline, when they were questioned by the CBI for about two days in Mumbai earlier this week.

"The agency is examining the data provided by them and is likely to register a criminal case against some bank executives," a CBI official told Business Standard.

The Enforcement Directorate (ED), which is probing alleged money laundering by Mallya, has reportedly found evidence of loans being diverted to 20 entities in India and abroad.

The bank accounts of these firms are likely to be frozen.

"Several links have emerged which indicate the money trail used in deals in Western countries, mainly in the US and the UK," a senior ED official said.

When asked about the Golden Eagle Trust in the Isle of Man set up by Mallya's father Vittal Mallya, the official said it could be one of the recipients of money taken out of India. "Trails also show the link to other tax havens like Liechtenstein, Panama and Monte Carlo," the official added.

The ED has received documents from almost all banks that lent money to KFA. The ED probe started with the default of a Rs 950-crore loan from IDBI Bank. The bank had, on Raghunathan's letters citing Mallya's meetings with top bank executives, sanctioned loans of Rs 150 crore and Rs 200 crore to the airline in 2009.

The CBI probe highlights how the sanctioned loans were misused by Mallya and that funds were diverted. The banks in their defence have said the loans were sanctioned accepting the assignment of the Kingfisher brand, a corporate guarantee from United Breweries Holdings, and a personal guarantee from Mallya.

The CBI is expanding its investigation to all alleged wilful defaults related to KFA. The agency is also preparing to move court to gather information on the foreign assets of Mallya and KFA.