Bank of Maharashtra: DSK Fraud

The Economic Offences Wing of Maharashtra Police arrested six bank officers and employees of DS Kulkarni Developers Limited in connection with the Rs.2,000-crore DSK fraud case. Those arrested include Bank of Maharashtra’s acting chairman and managing director Ravindra Marathe, and the bank’s ex-CMD Sushil Muhnot.

Marathe was arrested from Pune, while Muhnot was picked up from Jaipur. Both of them have been accused of advancing loans to the fraud accused realtor in an alleged major violation of banking norms. Also nabbed from Pune were BoM executive director Rajendrakumar Gupta, DSK’s chartered accountant Sunil M Ghatpande and DSKDL engineering department vice-president Rajeev Newaskar. The BoM zonal manager Nityanand Deshpande was arrested from from Ahmedabad.

The four arrested from Pune were later produced in the sessions court.

As their names were called out for the hearing, Marathe and Gupta looked visibly nervous; they sat in the witness box, while Newaskar and Ghatpande stood next to them.

Special public prosecutor Pravin Chavan told the court that the accused misused their power and position. A consortium of six banks was to sanction loans for DSK’s Dream City project in Phursungi, with plans to dole out Rs.600 crore. However, bank officers Gupta, Deshpande and Muhnot illegally sanctioned a loan of Rs.100 crore to DSK and passed a separate resolution without the permission of the other banks, also immediately transferring Rs.50 crore towards the Dream City. They have been accused of hatching a conspiracy in this regard.

Chavan further said the purpose for which the loan was passed was not fulfilled. The investigation revealed that this money was used to pay for bills and charges at a spa massage centre, for making photocopies, and to purchase shoes, rice, oil, floor decorations, vegetables, tailoring, along with other expenses.

In January 2016, DSK Group employees had faced severe salary problems, and thousands had quit their jobs. As many as 1,220 cheques had bounced, but the arrested bank officers did not consider all of this while sanctioning the Rs.100-crore loan to DSK, the prosecutor said, adding that to clarify role of each of them in the mess, custodial interrogation is necessary.

The defence advocates Harshad Nimbalkar, Shailesh Mhaske, Rishi Ghorpade and Rohan Nahar opposed this demand vehemently, with Nimbalkar arguing that Marathe and Gupta are officers of the rank of additional secretary and joint secretary, respectively, with the Government of India. He added that Pune police had obtained no sanction from the government or Reserve Bank of India for these arrests, and neither gave no intimation of this move, nor called for enquiries before the arrest.

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