Loan scam may get murkier

Nov 25, 2010 |

Correspondent

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Nov. 25: The arrested CEO of LIC Housing Finance, R.R. Nair has reportedly indicated that other senior officials of the insurance firm could be involved in the bribe for loan scam. Meanwhile, the Central Bureau of Investigations has sought clarifications from the private companies that had benefitted from the transactions on Thursday. A total of 17 such companies are on the CBI’s radar, several of whom had sent their representatives with relevant documents to the CBI on Thursday.

CBI on Wednesday had arrested top management officers of nationalised banks and LIC Housing Finance for allegedly accepting bribes along with officials of Money Matters, a Mumbai based financial advisory firm.

Money Matters was acting as a mediator and facilitator for corporate loans and other facilities from financial institutions. “Soon after the arrest of the officials, we had served notices to all the beneficiary companies under section 91 of the Criminal Procedure Code to explain their stand in the case,” a senior CBI official said. D B Realty, Adani and a few other companies have already sent their representatives with relevant documents today, the official said.

The companies that had been named as a part of the scandal tried to distance themselves from Money Matters. LIC’s management has also said that its total exposure to the tainted companies is low — just Rs 380 crore.

Meanwhile, LIC has also appointed a new CEO for its home finance arm — Mr V.K. Sharma, who was earlier heading the southern operations for the firm.

LIC has said that its asset quality — the money it holds on behalf of millions of policy holders — is not at risk. The public sector banks named in the scandal have also said that real estate forms only a small portion of their loan books and their balance sheets continue to be strong.

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