Saturday, February 25, 2017

CIC seeks detailed report from Oriental Bank of Commerce on loans extended to Vijay Mallya

India Today: New Delhi: Saturday, February 25, 2017.
Troubles are mounting for embattled businessman Vijay Mallya as the Central Information Commission has asked the Oriental Bank of Commerce and several probe agencies to explain a loan extended to his now-defunct Kingfisher Airlines.
The one-time billionaire, who moved to Britain last March, is wanted in India in connection with loan defaults of Rs 9,000 crore. The decision of the CIC, dated February 10, came against the backdrop of an RTI application in which the petitioner had asked from OBC the "total outstanding of M/s Kingfisher Airlines" towards the bank as also "details of security/collateral held by your bank", apart from "third-party audit conducted" by the bank to "verify the value of the collateral of M/s Kingfisher Airlines".
The petitioner, Gurugram-based information activist Harinder Dhingra, had also asked what the bank had done to recover the loan, the names of officials who had processed it and the notings on the file of the loan. M/s Kingfisher did not respond to Mail Today's queries despite repeated attempts till the filing of the story.
Dhingra has accused the OBC of having lent the once premier air carrier Rs 54.52 crore without any collateral as guarantee for the loan.
"It is strange that such innocuous information that pertains to public money be denied in the name of hampering investigation," he said.
"It is also strange that the bank does not know of what happened to the money it lent to the company- it doesn't know if the company has been declared a defaulter. There is at this moment not even the preliminary investigation has been launched and yet we can't get information."
The bank, however, did not furnish any information apart from how much the airlines owed it, stonewalling behind Section 8 (1) h of the RTI Act, arguing that "the matter was pending investigation before different investigating agencies and disclosure of the information could hamper the investigation process."
Mallya, once called the King of Good Times for cavorting with celebrities and publishing a much-sought-after swimsuit calendar, has been mired in a growing series of legal battles following the collapse of his carrier and was last month charged with conspiracy and fraud by the CBI.
In another revelation, the CIC order also noted that the bank did not even know whether it had declared Kingfisher Airlines a "willful defaulter". "…the representative of the Respondents (OBC) was unable to state whether the borrower had been declared a willful defaulter by the Respondent Bank or not".
The commission, however, took strong exception to the bank's denial to furnish information sought by the RTI application by simply invoking the stonewalling clause of the RTI Act.
"It is clear from the above (CIC quotes from Delhi High Court judgment of 2007) that information cannot be denied by the CPIO by merely invoking Section 8 (1) h, without giving adequate justification as to how disclosure of the information would impeded the process of investigation," it said. "The representative of the Respondents did not make any submissions to provide such a justification…" Unsatisfied with the answer received, the commission has asked the three investigation agencies-CBI, ED and SFIO-to put their submissions regarding why and how, if at all, the information could be detrimental to the investigation, before the next hearing of the case, on April 3.
The commission also asked that M/s Kingfisher Airlines also be represented at the next hearing, in case they want to make any submission. While the bank might have denied releasing the details to the petitioner, the commission asked the central public information officer (CPIO) of the bank to "file to the commission a report regarding the current status of the loan, the amount outstanding and whether the borrower has been declared a willful defaulter or not." The report is to be filed by March 20.