The Central Bureau of Investigation (CBI) on Friday evening charge sheeted industrialist and former tainted Finance Minister P Chidambaram’s cousin A C Muthaiah for cheating Syndicate Bank of more than Rs.102 crores ($15.11 million). According to CBI’s charge sheet filed before the court in Chennai said that Muthaiah was doing this fraud from 2004. His younger cousin Chidambaram was Finance Minister in UPA from 2004.
According to investigators, Muthaiah was blatantly violating banking norms and arm twisted bankers to pump money into his firm thanks to Chidambaram’s patronage
As per the charge sheet, Muthaiah’s firm First Leasing Company of India (FCLI) entered into financial transactions with the public sector bank Syndicate and inflated its revenues and siphoned more than Rs.102 crores. Apart from Muthaiah, his associate Farouk Irani and 20 other persons were charged as accused by the CBI. The charge sheet said that from 1998 onwards, Muthaiah’s financial company FCLI was fudging its accounts and showing inflated revenues. Cheating of Syndicate Bank started in 2004 when his cousin P Chidambaram became the Finance Minister.
Like Chidambaram, industrialist and former cricket administrator Muthaiah is very close to Sonia Gandhi. Senior Bharatiya Janata Party (BJP) leader Subramanian Swamy has alleged many times that the shell firm AE Services, which received and passed off kickbacks to middleman Ottavio Quattrocchi in Bofors scandal was first floated by Muthaiah and during the scam period the firm’s ownership was changed to foreigners. Muthaiah was a Honorary Consul of Belgium in India and awarded one of the highest civilian awards of Belgium to Sonia Gandhi. Later in 2013, due to his involvement in many financial irregularities, Belgium terminated him.
In June 2016, Syndicate Bank complained to CBI about the loot and forgeries committed by Muthaiah’s financial company during the tenure of his younger cousin, Finance Minister Chidambaram. According to investigators, Muthaiah was blatantly violating banking norms and arm twisted bankers to pump money into his firm thanks to Chidambaram’s patronage.
“It was alleged that the said Chennai based Company (a public limited Non-Banking Financial Company) was banking with Syndicate Bank, Corporate Finance Branch, Chennai since 2004. The accounting database maintained was in ‘Oracle’ which allowed the said Company to alter/manipulate it through back-end process. It was further alleged that the company had been showing inflated income as well as inflated assets over the years (since 1998) by showing fictitious income and non-existing assets. Most of the loans shown as granted by the said Company to their clients were allegedly fictitious. Loans availed from the Banks were allegedly diverted to the shell companies controlled by the then Managing Director to acquire shares of said Company only. It was also alleged that the NPAs of said Company were shown to be taken over by these shell companies through bogus agreements to avoid NPA provisions resulting in inflated profits, thereby causing loss of Rs.102.87 crore (approx.) to Syndicate Bank.
“Investigation revealed that the said accused persons along with 7 satellite/ shell companies in furtherance of a conspiracy with statutory and internal auditors had allegedly cheated the bank by submitting forged financial statements to obtain undue credit limits and siphoned the same away for extraneous uses whilst causing wrongful loss of Rs. 102.87 crores (approx.) to the bank. The investigation has also disclosed that the Promoter-Directors had allegedly misappropriated the assets of the company entrusted to them by using such loaned money to donate annually to a Trust run by the said accused,” said CBI in a statement after filing the charge sheet against the kingpin Muthaiah and others.
1. The conversion rate used in this article is 1 USD = 67.50 Rupees.
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