India's CBI Raids Kingfisher, Mallya Offices on Loan Default

  • IDBI Bank officials sanctioned loan in violation of norms: CBI
  • Searches conducted in five places in Mumbai, Bengaluru and Goa

India’s federal investigations agency searched the offices of Kingfisher Airlines Ltd. and its owner Vijay Mallya in connection with alleged default on a 9 billion-rupee ($139 million) loan from IDBI Bank Ltd.

The Central Bureau of Investigation registered a case against Mallya, the now-defunct Kingfisher Airlines, its chief financial officer A. Raghunathan and unknown officials of IDBI Bank, the agency said in a statement.

Officials of IDBI “colluded" with Mallya and Raghunathan, and sanctioned credit limits in “violation of banking norms," according to the statement. The searches were conducted at three places in Mumbai and one each in Bengaluru and Goa.

“The company co-operated with the officials and provided the necessary documents and will continue to offer co-operation," UB Group spokesman Sumanto Bhattacharya said in a text message. UB Group is controlled by Mallya. Two phone calls to corporate office of IDBI Bank in Mumbai went unanswered.

“Several incriminating documents found during searches are being scrutinized," the CBI statement said. “Further investigation is in progress."

Liquor baron Mallya’s Kingfisher Airlines was grounded in 2012 amid mounting debt. The shares of the airline were suspended from trading in Mumbai in December 2014.

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