The Economic Offences Wing of Pune police today arrested six people, including the serving and a former CMD of the Bank of Maharashtra in a cheating case lodged against city-based real estate developer D.S. Kulkarni and his wife, an official said today.
These bank officials did not stick to the RBI guidelines and did not verify if the loan amount was being used only for the project for which it had been sought, the EOW told a local court while seeking their custody.
The bank's present Chairman and Managing Director Ravindra Marathe, Executive Director Rajendra Gupta, Zonal Manager Nityanand Deshpande, bank's former CMD Sushil Muhnot, were arrested today.
Kulkarni's CA Sunil Ghatpande and vice president Rajiv Newaskar of the engineering department of D.S. Kulkarni Developers Ltd (DSKDL) were also apprehended.
While Deshpande was arrested from Ahmedabad, Muhnot was picked up from Jaipur. All the others were arrested from Pune, the police said.
They were booked under various sections of the IPC and the Prevention of Corruption Act.
"As part of our probe into the cheating case against Kulkarni, it came to light that these bank officials colluded with DSKDL by misusing their powers and authority with dishonest and fraudulent intention to sanction and disburse the amount under the garb of a loan," said Sudhir Hiremath, Deputy Commissioner of Police (Cyber and Economic Offences).
In May, the city police had filed a 37,000-page charge sheet against Kulkarni and his wife in the case.
As per the charge sheet, the total scam was worth Rs 2,043.18 crore. The accused had floated nine different firms to siphon off the funds collected from 33,000 investors and fixed-deposit holders who were promised good returns on their FDs.
Of the total scam amount, the deposit and loan fraud was to the tune of Rs 1,083.7 crore, banking and non-financial institutions-related fraud of Rs 711.36 crore, debentures fraud of Rs 111.35 crore and fraud related to Phursungi land purchase is of Rs 136.77 crore, the EOW officials had said.
The police were probing the role of these bank officials for allegedly sanctioning loans to the builder without following due diligence.
According to the complaint filed with the EOW by one of the depositors, investors put in lakhs of rupees in a fixed-deposit scheme of the DSK Developers, but they neither received the interest nor the principal amount.
The EoW had booked the Kulkarnis under various sections of the Maharashtra Protection of Interest of Depositors (MPID) Act along with IPC sections 420 (cheating and dishonestly inducing delivery of property), 406 (criminal breach of trust) and 34 (common intention).
The developer and his wife were arrested from Delhi on February 17 by the Pune Police.
With today's arrest, the total number of arrests in the case has gone up to 12.
Kulkarni's son Shirish's pre-arrest bail application was rejected by the Supreme Court on June 19 and he was likely to be arrested in the case, the police said.
Those who were arrested today were produced before a court here and were remanded in police custody till June 27.
While seeking their custody, the police told the court that the accused bank officials – Gupta, Munhot and Deshpande – did not follow the set guidelines of the Reserve bank of India while sanctioning the loan amount and disbursing a part of it to DSKDL.
"The bank officials, under the consortium, had sanctioned a loan of Rs 100 crore to Kulkarni's Dream City Project when other banks in the consortium were yet to give their nod for funding to the project," the remand plea said.
Further, after sanctioning the loan, the accused made the changes in the original proposal and disbursed Rs 50 crore to Kulkarni, it said.
The EoW also told the court that the loan was to be used for a particular project, but BOM officials did not ascertain if the DSK Group was using the money for the stated purpose.
Meanwhile in a statement, Bank of Maharashtra said its exposure to DS Kulkarni Developers was around Rs 94.52 crore, which was fully secured.
"Our total outstanding exposure to DS Kulkarni Developers is to the tune of Rs 94.52 crore which is fully secured with primary and collateral securities," it said.
The recovery process had already been initiated by the bank and some of the properties were due for auction, it said.
The bank also declared DS Kulkarni Developers and its promoters as wilful defaulters and claimed that the loans sanctioned to the firm were as per the bank's lending norms.