ED interrogates IDBI officials in Kingfisher loan case

Investigators asked how the loan was given, which had poor financials and negative net worth

The Enforcement Directorate (ED) interrogated five serving and former executives of the IDBI Bank in connection with the Rs 950-crore loan the bank gave to Kingfisher Airlines in 2009.

An ED official told Business Standard: “They (bank officials) have submitted a slew of documents with regards to credit extensions, meetings over loan sanctions along with the diktat of the officials concerned, who were then the part of sanctioning authority.”

The ED had issued summons to Yogesh Agarwal, former chairman and managing director of IDBI Bank, and four other former or serving executives — BK Batra, OV Bundellu, R Bansal and SKV Srinivasan — who were key members of the credit committee.

The investigating agency is examining the documents and will soon call respective bankers for cross-questioning, said a source.

“The bank officials are alleged to have violated the banking norms while sanctioning the loan to the airline,” said an official

The bank officials were questioned about how the loan was given to Kingfisher, which had poor financials and negative net worth.

The ED recently filed a case against Vijay Mallya, Kingfisher Airlines and IDBI Bank executives under the anti-money laundering law.

The probe agency is investigating the diversion of a sizeable chunk of funds, which was used for foreign remittances towards lease rentals, purchase of aircraft parts etc.