THE Central Bureau of Investigation (CBI) has decided not to pursue the bribe-for-loan case which the agency claimed to have exposed in 2010 during the UPA government’s term due to lack of evidence, officials familiar with the development told The Indian Express.
In November 2010, the CBI said it had busted a racket where key executives in large finance companies, including banks and India’s largest insurer, Life Insurance Corporation of India (LIC), sanctioned large corporate loans and disclosed confidential information in return for bribes.
The agency then arrested five executives from LIC, LIC Housing Finance Ltd, Bank of India, Central Bank of India and Punjab National Bank. It also arrested three top executives of Money Matters Financial Services, a money market intermediary, for allegedly bribing executives in finance firms to sanction corporate loans running into thousands of crores to clients.
The CBI’s decision not to pursue the case has come after a special CBI court in Mumbai recently discharged the arrested executives due to lack of evidence. Sources in the CBI confirmed that it will not challenge the decision in the Bombay High Court.
“The matter was referred to the legal team to get its view on whether we should pursue the case further. Looking at the evidence cited by us, which is mostly tapped telephone conversations between the officials, we have been advised not to challenge the discharge. The legal team feels the evidence will not stand the scrutiny of the High Court,” a senior official from the agency told The Indian Express.
“The entire case was based on telephonic intercepts between the officials of various public sector banks and those of Money Matters. However, most of the transcripts do not ascertain their complicity in the case,” said another official, who spoke on the condition of anonymity.
The CBI move assumes significance as it had informed the special court, after the arrest of these officials in 2010, that a consortium of 15 banks had sanctioned loans through Money Matters to several firms, including Emaar MGF, Ashapura Minechem, Jaypee Group, Suzlon, BGR Energy, Sunil Mantri Group, Lavasa, OPG Group, Trishna Group, and Kumar Developers.
Soon after the CBI disclosure, the finance ministry asked all public sector banks, other financial institutions and insurance companies to review their exposures to various companies mentioned by the agency and carry out an independent evaluation on the asset quality, documentation and compliance with prudential requirements.
The then finance minister Pranab Mukherjee had also instructed banks to take appropriate action against individuals involved in the scam. Following the directive, the arrested executives were immediately removed from their posts.
The CBI’s latest decision, however, is bound to raise questions over the quality of its investigation, particularly since it is currently handling several high-profile cases involving wilful default of loans by big companies.
UPDATE: Mr Rajesh Sharma, Accused in Spl Case CBI Nos: 9/11, 65/11, 66/11, 71/11 & 72/11 has informed that he was discharged from prosecution commenced under provisions of the IPC and Prevention of Corruption Act, 1988 in all these cases by Orders passed by HHJ Sp Judge Mr A A Khan (CR 47) on 17.06.2015.
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