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.
Note:
1. The conversion rate used in this article is 1 USD = 67.50 Rupees.
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In any scandal, what I observed was that the bank’s CEOs and high officials are taken into task. What about the middle class officials and clerical staff (if need be) are left scot free to investigate the root cause of the scam? Most of the scams start from the lower or clerical staff. What about the politicians involved? No news about them. Very sad!
[…] Chidambaram’s cousin A C Muthaiah charge sheeted by CBI for looting Rs.102 crores from Syndicate B… – Jun 8, 2018, […]
Yes, after the 90% success of our Chandra yam 2, we are slowly realizing the reason and cause for the rotten state of our economy over the past 7 decades. What ever honest and sincere Service done by lakhs of people is going down the drain because of well connected corrupt politicians, burocrates and supporters who all operate so well,… great. Can you believe all this, when you see the ever smiling face of MC??!!
Nothing is going to happen, no case can be proved. Entire system is corrupt. Karti could call the court at midnight, as if it was an emergency. Chidambaram always getting anticipatory bail. One day they will run away and agencies will blame each other.
Financial fraud has become a huge monster affecting our economy. Banks sanction large amount of loans on the basis of forged papers vetted by CAs, lawyers, bank officials etc. Exemplary punishment must meted out to all the intermediaries to reduce such financial fraud. It is a huge task but, Govt. should set an example by taking stringent action against these intermediaries viz. CAs, lawyers, bank officials etc. to send out a strong signal.
The Auditors both External & internal should also be taken to task. To shore up public confidence the case should be decided within say 6 months.
Disgusting organised Loot and collusion by all watch dogs. Total revamp of the system is called for.Public expects conclusion fast. Enough is enough. When will India come out of the devious ways of “Crook Chidu & gang”. This is the price paid by public for electing corrupt Congress & their Coalition.
Ravi, I agree with you. Such cases where political personalities or their kith & kin are involved should be brought under FAST TRACK COURTS with DAILY HEARINGS and no ADJOURNMENTS.
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Also since these scams are mostly document based, even 6 months will be too long a period.
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Will the NDA Government establish such SPECIAL FAST TRACK COURTS through ordinance?
Why the auditors are NOT accountable for their actions ? Why it has to always go through the stenuous process of CBI & courts…. why the auditors should not be blacklisted. Is the auditor’s body an untouchable ?? Does it require parliamentary approval ?? Is it a toothless organization ??
As usual the MAIN STREAM MEDIA PRESSTITUTES either ‘refrained from reporting this news’ or ‘observed silence on the relation of this ras-cal Muthiah to the dhoti-clad-scoun*drel-Chidambaram’
CBI’s charge sheet filed before Chennai Court said that Muthaiah was doing this fraud from 2004 – FINE
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His younger cousin Chidambaram was Finance Minister in UPA from 2004 – FINE
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Syndicate Bank complained to CBI about the loot and forgeries committed by Muthaiah in June 2016 ??!!
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Was the Syndicate Bank sleeping for well over 2 years? or the Syndicate Bank Chief’s tenure appointed by Chidambaram expired only in June 2016.
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CBI probe should include the SENIOR OFFICIALS who were colluding & abetting the crime?
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UNLESS THESE TRIALS ARE CONDUCTED IN ‘FAST TRACK COURTS’, THE CULPRITS MAY NEVER BE PUNISHED
Why is BJP dragging it’s feet?
This looter should be jailed. He has consistently looted SPIC , SPIC petro and many other companies and has ruined many banks. Send him to jail permanently
PC family is looter family.