Kingfisher Airlines: CBI chief blasts lenders

Warning that non-payment of loans by big borrowers will erode people’s faith in the law, the CBI on Wednesday blasted lenders for not coming forward with a complaint in the Kingfisher Airlines “fraud”, saying the delay helped the company “divert funds and destroy evidence”.

“The message to the public is that the rich and powerful are able to avoid consequences of cheating and fraud, while the ordinary citizens are promptly booked. 

This undermines faith of people in rule of law, which has dangerous consequences in a democracy,” CBI Director Anil Sinha said at a bankers’ conference here.

Citing the Kingfisher Airlines’ case, in which the Vijay Mallya-promoted airliner has defaulted on loans of Rs 7,000 crore way back from Janaury 2012, Sinha said, “Despite our repeated requests, the banks did not file a complaint with the CBI. We had to register the case on our own.”

Regretting that only “one among the 17 lenders” who owed money, had declared KFA as a “wilful defaulter”, Sinha said the loans in question were taken between 2004 and 2012, while the CBI filed the case only in July 2015.

The comments, made before an audience comprising top bankers, including Arundhati Bhattacharya of SBI, ICICI Bank’s Chanda Kochhar and Axis Bank’s Shikha Sharma, come amid a huge spike in banks’ bad assets and the RBI’s attempts on cleaning up the books to show a true picture of the balance sheets.

Bhattacharya refused to react on the critical comments of the CBI chief, saying she does not speak on specific accounts. Industry lobby IBA’s chairman and head of state-run Dena Bank Ashwani Kumar said there is nothing which can be called “deliberate” in the case of KFA”.

“The CBI Director’s view is that in some cases there is delay in filing complaints for fraud... but it is not deliberate,” Kumar claimed.