India’s finance ministry suspended the chief of Syndicate Bank, a state-run lender, after the Central Bureau of Investigation accused him of bribery.
Sudhir Kumar Jain, chairman and managing director of Syndicate Bank, was suspended after the government was told by the federal investigators about registering bribery cases against him, Financial Services Secretary G.S. Sandhu said in New Delhi today. Two executive directors of the bank will manage operations as an interim arrangement, Sandhu said.
The investigators registered two cases against Jain, and 11 others for violation of the country’s laws on corruption and criminal conspiracy, the bureau said in a statement Aug. 2. Shares of the Bangalore-based lender slumped 6.9 percent to its lowest price since May 19 at the close of trading in Mumbai.
The bank’s chief has been negotiating “for illegal gratification directly as well as through middlemen” in exchange for providing financial advantages to private companies, the bureau said. Jain couldn’t be reached outside of business hours at his office today.
Bhushan Steel Ltd. and Prakash Industries Ltd. are the companies that sought favors from Jain, Kanchan Prasad, a New Delhi-based spokeswoman for the CBI, said by phone today. Bhushan Steel fell 3.6 percent to its lowest level since March 2012, while Prakash Industries tumbled 20 percent in the steepest drop since January 2001.
“Our company is not involved in any manner with regard to the alleged payments and the same are denied and hence in our opinion would not have any material impact,” Bhushan Steel said in a filing to to the exchange. Phone calls made to officials at Prakash Industries’ office weren’t immediately answered today.