Top State Bank executive in the dock

CBI accuses deputy MD of taking Rs 15 lakh as bribe on Rs 75-cr loan; bank sets up probe panel, sends him on leave

There was a deafening silence on the 19th floor of the State Bank of India headquarters here on Tuesday where the office of Shyamal Acharya, the bank’s deputy managing director (DMD), is located. On other floors, except the 18th where the chairman sits, people were talking in hushed tones and the overall mood was one of surprise.

The surprise turned into shock (a couple of his former senior colleagues said they could never imagine Acharya, of all people, could do this) when the Central Bureau of Investigation (CBI) gave further details of the case registered on Sunday against Acharya, besides former SBI additional general manager K K Kumarah and Worlds Window Group (WWG) Chairman Piyoosh Goyal, for alleged collusion to profit from a large bank loan.

The case was registered by the Economic Offences Wing of CBI in Mumbai. While Kumarah had been arrested and remanded to police custody till November 27, CBI sources said, further action would be taken against others in a couple of days on the basis of the investigation’s progress.

UNBANKABLE?

Other recent high-profile cases involving bank officials

• MONEY MATTERS: Maninder Singh Johar, a director of Central Bank of India was accused in the Money Matters financial scam in 2010. CBI accused Johar and Money Matters officials conspired to facilitate loans from the Central Bank of India, unlawfully
• STATE BANK OF INDIA: In 2007, CBI had filed a chargesheet against former SBI managing director, Y Radhakrishnan, for allegedly siphoning off funds worth Rs 5 crore to acquire a college, among other things
• INDIAN BANK: Former Indian Bank CMD M Gopalakrishnan and six other former officials of the bank were sentenced to a year’s rigorous imprisonment by a CBI court in Chennai on September 7 for allegedly causing a Rs 31.75-crore loss by granting loans without proper security between 1992 and 1996.

In a detailed statement on Monday evening, the CBI also talked about involvement of “other unknown officials of SBI and other unknown private persons”.

Goyal wanted a loan of over Rs 75 crore from SBI for his firm. Kumarah assured him of his contacts in the bank through whom he could get the loan passed. An arrangement was reached between Kumarah and Goyal under which the former was to get Rs 25 lakh for his services and Acharya Rs 15 lakh. Kumarah is said to have bought a Rolex and an Omega watch (worth Rs 7.75 lakh) to be given to Acharya for his alleged favours.    Turn to Page 7 >

The CBI statement said the former SBI official delivered the wrist watches to the DMD. While Kumarah was arrested when he came out of the office, the watches were recovered from the DMD’s cabin. “The DMD allegedly influenced his office to process the loan application and got the loan sanctioned,” the statement said. Searches were conducted at the residences and office premises of the accused persons. Gold & jewellery worth Rs 67 lakh, a locker key, fixed deposits and other incriminating documents were recovered from the residence of the DMD, CBI said.

In a statement, World Window Impex, WWG’s flagship company dealing in ferrous and non-ferrous metal and scrap trading, denied it had paid any bribe to avail of any facility and was consulting its legal advisors for further action in the matter.

The country’s largest bank said it has constituted an internal panel, comprising two managing directors, to probe the corruption charge against Acharya, who was asked to go on leave a day after CBI raided his residence.

Though an SBI statement did not name the MDs in the probe panel, sources familiar with the development said they were Hemant G Contractor and A Krishna Kumar. The bank did not give any timeframe for filing of a report by the panel.

SBI said it stood committed to probity in its dealings and assured it would continue to hold the highest standards of honesty and transparency in operations. If found guilty by the court, the three could face a jail term of six months, extendable to five years, and a possible financial penalty.

The issue has arisen almost 20 years after an officer of the DMD level had been accused by CBI of taking bribes for sanctioning loan. It was in 1992-93 when C L Khemani, then the DMD, was implicated in the Harshad Mehta scam.

A few SBI insiders said the loan to WWG was sanctioned by the bank’s mid-corporate committee earlier. A familiar face in media circles, Acharya was chosen by the bank to take journalists’ questions on lenders’ moves on Kingfisher Airlines. It was he who had announced to the world that banks had decided to recall loans given to the debt-ridden airline.

A commerce graduate who rose steadily up the ladder since joining as probationary officer in 1976, Acharya is due to retire in six months and has often spoken about his desire to go back to Kolkata, his birth place.

Much of his career at the senior level was spent with the mid-size corporate segment. Before moving to the bank’s headquarters, he was chief general manager for the Mumbai circle (Goa and Maharashtra).

On the other hand, Goyal’s WWG, established in 1993, is a Rs 1,100-crore group today. It employs 1,000 people and its website quotes Goyal as saying that he always encouraged the philosophy of “thinking unconventionally and finding ingenious solutions to the tasks at hand”. It’s obvious the country’s leading investigative agency appears to have several problems with his unconventional thinking.