Bank of Maharashtra officials get clean chit in DSK loan case

According to police, a loan of Rs 600 crore was raised by D S Kulkarni Developers Limited (DSKDL) to finance its project – DSK dream city in Pune – by a consortium of six banks led by the State Bank of India (Rs 200 crore).

OVER three months after three senior officials of the state-owned Bank of Maharashtra (BoM), including its CMD, were arrested by the Economic Offences Wing (EOW) of Pune police in a case involving the city-based DSK Group, which has allegedly cheated thousands of depositors, Pune police have filed a closure report, saying the officials had sanctioned loans as part of “normal banking transaction”.

The three BoM officials – Ravindra Marathe (CMD), Rajendra Gupta (Executive Director) and Sushil Muhnoot (former CMD) – were arrested on June 20, leading to protests by the banking industry and prompting senior government officials in New Delhi to step in and engage with the Maharashtra government as such cases are referred to and handled by the CBI. “We have filed a closure report under Section 169 of the CrPC as we haven’t found any evidence against the three bank officials,” Pune police commissioner K Venkatesham told The Sunday Express. “However, we have sent a detailed report to the department of financial services so that they can probe if there were any irregularities committed by the three officials,” Venkatesham said.

In October last year, Pune police registered a case of cheating and forgery against Deepak Kulkarni, Hemant Kulkarni and Shirish Kulkarni of DSK Group along with sections of MPID Act. According to police, the accused allegedly committed fraud to the tune of Rs 2,043.18 crore, which includes Rs 1,083.7 crore taken as deposits and loans from depositors, Rs 711.36 crore of loans taken from banks and financial institutions. Deepak and Hemant were arrested in February this year.

According to police, a loan of Rs 600 crore was raised by D S Kulkarni Developers Limited (DSKDL) to finance its project – DSK dream city in Pune – by a consortium of six banks led by the State Bank of India (Rs 200 crore). According to the closure report accessed by The Sunday Express, in February 2016, BoM’s credit approval committee approved a loan of Rs 100 crore to the company on the condition that, “sanctioned facility shall be released only after full tie up of required debt/financial closure”, is met. “However on March 19, 2016, the committee, headed by then CMD Sushil Muhnoot and which included BoM Executive Director Rajendra Gupta as its member, made changes to the credit approval conditions and allowed Rs 50 lakh to be disbursed, which was disbursed on March 22, 2016,” the report states.

“No evidence has been found that the accused committed the crime under IPC and MIPD sections invoked against them. The bank officials are not involved in the fraud caused by DSKDL and neither did they make any forged documents to help the company. the bank officials didn’t connive with the company to cause loss to the depositors but only took imprudent business decisions and had complied according to the norms set by RBI and central government,” the report says.