MUMBAI, AUG 15: The saga of Bank of Rajasthan (BoR) mismanagement has entered a new phase with an enquiry by the Central Bureau of Investigation revealing diversion of Rs 69.155 crore to the group/front companies of former BoR promoter Bangurs. The enquiry was ordered by the Rajasthan High Court following allegations of fund diversion to the tune of Rs 277 crore by the former promoters. In its interim report submitted to the High Court, CBI said ``funds were sanctioned by BoR to front companies of Keshav Bangur from where they were further diverted to Bangur Finance through various intermediaries.'' It said various amounts were sanctioned by BoR by way of packing credit limit, working capital limits, investment in preference shares and bill purchases. The report has listed five front companies of Keshav Bangur - Commodity Exchange Corpn, Xitiz Exim, Shanoo Exports, Gangaur Nirman and SM Commercial - which got Rs 29.50 crore by way of packing credit. Moreover, Rs 15.105 crore was sanctioned as ICD/short-term loan to front companies of Bangur by Rajasthan Bank Financial Services, a subsidiary of BoR. Besdies, nine companies were sanctioned Rs 14.255 crore, part of which was transferred to front companies of Bangur. However, the report said ``the enquiry conducted so far could not establish allegation pertaining to diversion of funds to the tune of Rs 150 crore by Keshav Bangur by way of loans to corporates and individuals not connected with the bank.'' The bulky report has given details of fund diversion and how it reached various Bangur companies through various transactions. According to the probe report, Bangur and his family members had substantial shareholding in many of these front companies. ``Most of the funds transferred to Bangur Finance were stated to be towards repayment of ICDs and investment in stock market.. no exports were made against packing credit limits by most of the companies. In the case of packing credit limits, the amount was not utilised for the purpose for which it was sanctioned and the entire amount is outstanding,'' it said. The probe also touched on the acquisition of stake by the Bangurs in BoR. The RBI had removed Keshav Bangur and SN Bangur from the board of directors of BoR following various irregularities in October 1997. While the Bangurs controlled the bank from 1993 to 1997, SK Mansinghka, SP Mansinghka and CL Jaipuria were running the bank till 1993. Thereafter, the Tayals took control of the bank in 1998. The RBI asked the Tayals to deposit Rs 20 crore, bring out a rights issue of Rs 60 crore, achieve a capital adequacy of nine per cent by 2001 and recover non-performing assets from various Bangur companies. BoR had recovered NPAs worth Rs 52 crore during the year ended March 2000 and set a target of further recovery of Rs 100 crore during March 2001. The capital adequacy ratio of the bank which was negative has gone up to 6.7 per cent as on June 30, 2000. The bank is expected to achieve nine per cent capital adequacy this year and pay dividend by 2001-2002. In the meantime, the tussle between the Bangurs and the Tayals also continued with both the parties amking claims and counter-claims. The CBI has asked for extension of enquiry period by another six months to complete the investigation into various irregularities.
