According to the complaint, the Bank cheated him and conducted a farce auction and allotted the hotel to Padmini at a very cheap rate of Rs. 4.5 crores ($675,000).
Kathirvel is a businessman in his late 40s, and runs a hotel, poultry, education and real estate business in the southern states. According to his complaint to CBI, in 2007, ‘Comfort Inn’, a hotel in Tirupur in which he was a partner, was grabbed by Padmini, sister of Chidambaram’s wife Nalini with the help of top management of Indian Overseas Bank (IOB). The hotel is worth more than Rs. 10 crores ($1.5 million) and had a loan due of Rs. 2.5 crores ($375,000) with the IOB and IOB declared the loan as a Non-Performing Asset (NPA) and announced auction. Kathirvel approached Madras High Court and later Debt Recovery Tribunal and paid Rs. 64 lakhs ($96,000) to the IOB to avoid auction. Chidambaram was the Finance Minister then.
After receiving Rs. 64 lakhs ($96,000), the Bank promised cancellation of auction. According to the complaint, the Bank cheated him and conducted a farce auction and allotted the hotel to Padmini at a very cheap rate of Rs. 4.5 crores ($675,000). The hotel’s value was more than Rs. 10 crores ($1.5 million) and all of a sudden Padmini with the help of mob of goons barged into the hotel and forcefully acquired the hotel. PGurus reported the full details of this case: https://www.pgurus.com/businessman-kathirvel-files-complaint-cbi-chidambaram-family-iob-hotel-grab/.
Nalini was the advocate of Padmini and upon Kathirvel’s complaint, Chidambaram the then Finance Minister claimed that he had directed Nalini to leave the case of sister. In his letter to Kathirvel, Chidambaram pretended innocence. Kathirvel also produced Nalini’s audio and transcripts with him in forcing him to leave the hotel. She even gave him compensation of Rs.2.5 crores in a cheque.
Arguing for Kathirvel, Advocate Yatinder Chaudhary said this is a clear case of abuse of power by the Finance Minister’s family using banks to grab the properties they wish. He pointed out that even after clearing the dues, the Bank went against with a mock auction to allot the hotel to Finance Minister’s sister-in-law and the IOB officials are still harassing his client. Justice R K Gauba asked CBI’s advocate why the agency has not acted till date. Judge directed CBI to its submit status report by July 25th.
1. The conversion rate used in this article is 1 USD = 66.71 Rupees.
2. Text in Blue points to additional data on the topic.
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