Bank of Maharashtra divests CEO and executive director of their powers

In a major development, the board of Bank of Maharashtra (BoM) has divested managing director R P Marathe and executive director R K Gupta of their powers with immediate effect.
Both Marathe and Gupta, who were arrested by the Economic Offence wing of the Pune Police in an alleged cheating case, are currently on bail.

The board has asked the government to make suitable arrangement for smooth functioning of the bank.
The board of directors of the bank in its meeting held today decided that "R P Marathe, managing director and CEO, and R K Gupta executive director of bank be divested of all functional responsibilities with immediate effect," Bank of Maharashtra said in a regulatory filing to stock exchanges.
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Meanwhile, the board decided that executive director A C Rout to be entrusted with all functional responsibilities of managing director and CEO and other executive director.
Last week, Economic Offence Wing of Pune police arrested Bank of Maharashtra's MD and CEO Ravindra Marathe and other top officials of the bank in connection with a cheating case lodged against D S Kulkarni and his wife Hemanti.
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In May, the city police had filed a 37,000-page chargesheet against DSK and his wife in the case.
According to the chargesheet, the total "scam" is worth Rs 20.43 billion, wherein the accused floated nine different firms to siphon off funds collected from 33,000 investors and fixed-deposit (FD) holders, who were promised good returns on their FDs.
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Former Chairman and Managing Director Sushil Muhnot who was arrested in the case too was granted bail.
Last month, the board of PNB divested executive directors K V Brahmaji Rao and Sanjiv Sharan of their powers in connection with the USD 2-billion fraud perpetrated by billionaire diamond jeweller Nirav Modi.
Allahabad Bank too take away all the powers of its CEO and MD Usha Ananthasubramanian, former chief of Punjab National Bank, in connection with the same fraud.
Ananthasubramanian was the MD and CEO of PNB from 2015 to 2017 and was questioned recently by the CBI in connection with the case.

PNB fraud redux? Bank of Maharashtra knocks CBI's door in loan default case

Adding to the bandwagon of loan defaulters, the Bank of Maharashtra has filed an FIR with the Central Board of Investigation (CBI) against Delhi-based businessman Amit Singla and others over an alleged loan default.
The accused are M/s Ashirwad Chain Co-Proprietor Amit Singla, his father Roshan Lal and mother Sumitra Devi, M/s Tech Mach international(p) Ltd, and other person(s), company(s) or firm(s) who may have conspired with the accused persons, the bank said.

M/s Ashirwad Chain Company, the bank said, was sanctioned CC of Rs 3.5 million (Rs 350 lakhs) on October 27, 2010 that was enhanced to Rs 5.5 million (Rs 550 lakhs) on September 09, 2011, and further to Rs 9.5 million (Rs 950 lakhs) on August 22, 2012.
As per the FIR, the bank alleged that the accused persons in a criminal conspiracy, deceived it and dishonestly induced the bank for getting the loan on the false representation by forging documents and criminally misappropriated and used the said loan amount.
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The bank also alleged that during the time of enhancing the credit facilities, overvalued valuations were deliberately given in connivance with the borrowers and guarantors by the valuer, M/s.
Tech Mach International, in order to cause the undue advantage to the borrower and guarantors, and fraudulently induce the bank to finance the borrower on the basis of the valuations given.
Singla had put three properties as collateral which were valued at over Rs 180 million (Rs 18 crore) by Tech Mach International at the time of taking the loan, but the actual market value of the properties were found to be only Rs 25 million (Rs 2.5 crore) after the loan turned into an NPA.
To this, the bank said the accused persons had submitted the inflated stock audit report and inflated balance sheet to avail the loan, adding that they diverted funds of the bank against the terms and conditions of the sanction, thus causing "wrongful loss to the bank and wrongful gain to themselves."
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An investigation into the matter was conducted by S K Saha, the assistant general manager of the bank, whereby a wide gap was found in the valuation of the properties collaterally secured with the bank at the time of sanction and enhancement with its present market value.
Furthermore, it was found that the number of transactions had taken place through RTGS among associate/sister concerns, controlled by its proprietor or his family members just to inflate sales figures and siphoning bank funds.
The complainant had in a letter dated December 24, 2014, informed all the accused that the CC Account of the classification of the CC account as a non-performing asset (NPA) in accordance with the guidelines of the Reserve Bank of India (RBI).
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However, Singla, the bank alleged, failed to maintain financial discipline and defaulted in properly maintaining the said CC account in addition to various other breaches and violations of the sanction of the said CC facility. Consequently, a huge outstanding became due and payable to the bank, it said.
The bank also assured that original papers relating to property mortgaged and other correspondences exchanged by the it with the borrower, the above named accused and other banks were in its possession, and would be handed over to the investigating officer as and when required/directed.