Court denies bail to former IDBI Bank CMD in KFA loan case

A CBI court here today refused bail to a former CMD of IDBI Bank and two others in the loan default case involving the defunct Kingfisher Airlines (KFA).
Vijay Mallya, former KFA chairman, is a wanted accused in the case.
"The bail (applications) of Yogesh Aggarwal (former CMD of IDBI Bank), A Raghunathan (former CFO of KFA) and IDBI executive B K Batra is rejected," said the special judge for CBI cases H S Mahajan.
The court, however, granted bail to IDBI executives O V Bundellu, S K V Srinivasan, R S Sridhar, and Kingfisher executives Shailesh Borke, A C Shah and Amit Nadkarni on bonds of Rs 50,000 while imposing several conditions.

All the accused were arrested on January 23.
CBI had said the IDBI Bank officials unduly favoured KFA in the sanction and disbursement of loans of Rs 1,300 crore.

KFA diverted Rs 260 crore of the loan amount while using another Rs 263 crore to pay salaries, tax deducted at source, income tax and loan instalments, CBI alleged in charge sheet.
(Reopens LGB 4)
IDBI showed "undue favour" to KFA in the sanction and disbursement of short-term loans of Rs 150 crore in October 2009 and Rs 200 crore in November 2009, and another corporate loan of Rs 750 crore in November 2009, according to CBI.

Despite weak financials, negative net worth and low credit rating of KFA, and despite the fact that it being a new client did not satisfy the norms of corporate loan policy of the bank, loans were sanctioned, CBI said.
Significant amounts were also remitted out of India on the pretext of payment of lease rental and purchase of aircraft parts, while Rs 3.45 crore were paid into the bank account of Kingfisher in London, the agency said in the charge sheet filed on January 24.
The applications for availing of short term loans were submitted by A Raghunathan where he gave reference of meetings between Mallya and then CMD of IDBI, Yogesh Aggarwal. These loans later became non-performing-asset, resulting in a loss of over Rs 900 crore to IDBI, the CBI said.