The Jammu and Kashmir Bank is back in news yet again for the wrong reason. Recently, its Chairman and Chief Executive Officer Parvez Ahmad Nengroo was sacked on grounds of corruption and was immediately replaced by R. K. Chibber as the interim chairman. Hours after his removal, the Anti Corruption Bureau (ACB) had raided the bank headquarters on the allegations of irregularities in appointments and other dealings in the bank during Ahmad’s term.
In a fresh series of loan fraud allegations, the ACB expanded its scope of the investigation beyond Kashmir region to conduct searches across different premises in Jammu.
— TIMES NOW (@TimesNow) June 28, 2019
According to reports by Times Now, the ACB investigation has unravelled more loot. The investigation agency is believed to have unearthed a scam to the tune of Rs 170 crore wherein the bank is suspected of lending a large amount of money to undeserving business entities and later settling these dubious loans at a much lower than the sanctioned loan or the disbursed amount.
— TIMES NOW (@TimesNow) June 28, 2019
The ACB and Income Tax (IT) officials also raided the house of Hilal Rather, prominent businessman and son of senior National Conference (NC) leader and Former Finance Minister of State Abdul Rahim Rather.
The agency has registered a case against the management of J&K Bank and two firms owned by Rather under the Prevention of Corruption Act. As per reports, in its fresh raids outside Kashmir, the agency believes at least Rs 30 crore have been siphoned off directly. The agency has also been able to recover incriminating and evidentially valuable materials including laptops and gadgets. It believes the investors have been cheated of their money in a similar fashion.
Investigation reveals that Rather had fraudulently obtained Rs 177.68 crore in loan amount in connivance of J&K Bank officials. Out of which, Rs 50 crore was later waived off illegally by resorting to One Time Settlement (OTS).
The raids in Paradise Avenue and Simula Solutions owned by Rather and other properties of individuals and companies connected with these firms was supervised by Anand Jain, Director of ACB after obtaining search warrants from the court.
During these raids, the officials recovered documents and laptops pointing out to a deep-rooted conspiracy between the management of J&K Bank and the firms belonging to Rather and evidence that the bank awarded him with undue benefits.
According to the official spokesman of the ACB, a Joint Surprise Check (JSC) on J&K Bank officers revealed that rules were flouted to extend loan to Rather’s firms between 2012 and 2017, which was later turned into NPA.
The investigation revealed the proprietors had approached New University Campus Jammu Branch of J&K Bank to avail Rs 74.27 crore to set up Paradise Avenue, a residential township complex at Narwal comprising 52 flats in the towers named as Eden and Zion.
Reports suggest that loan was sanctioned on 30.01.2012 with one of the pre-requisite conditions that loan would be disbursed in a phased manner after securing margin of Rs 22.09 crore including the unsecured loan of Rs 2 crore from the borrowers on pro-rata basis.
The scrutiny of records, however, revealed the proprietors purchased 30 kanals of land from different landowners through registered sale deeds in July 2012, six months after the loan was sanctioned. This clearly pointed out that loanee firm had lied about the land title at the time of mortgaging it to the bank.
“Under a well-knit and pre-designed conspiracy hatched by the loanee firm with the bank officials, the amount of sale consideration reflected in the sale deed was shown paid through cheques to the landowners fraudulently and dishonestly with inflated cost of the land whereas those cheques were actually taken back from the landowners and fresh cheques were issued to them from the loan account of M/s Paradise Avenue and loan account of Shree Simula Solutions, other sister concerns of the leading partner of the firm with the objective and purpose to buy the land in question out of the loan amount alone sanctioned by the bank”, investigation of the ACB pointed out.
The bank officials connived with the proprietors of the firm to flout norms and sanction the loan amount against the purchase of land for raising the residential township.
While the bank was slated to release the loan amount in phases, the bank instead disbursed 100% amount by March 2014 in favour of the proprietors.
“The firm borrowed three additional loans worth Rs 68.91 crores, Rs 20 crores and Rs 14.5 crores. Hence in total, the proprietors of the firm managed to obtain Rs 177.68 crores loan illegally and fraudulently in connivance with the bank management and its officials”, the ACB spokesman added and further said, “the repayment of the loan amounts was to start from September 2017 with a quarterly instalment of Rs 11.27 crore. However, the proprietors turned wilful defaulters with sole objective to get their loan account declared into NPA and consequently they succeeded in their goal on 31.12.2017.”
The deep-rooted conspiracy between the bank management and the beneficiary firm is highlighted by the fact that the Principal Loan Amount of Rs 177.68 crores was illegally settled at Rs 130 crores under One Time Settlement (OTS). Out of this amount, the borrowers’ cheque for Rs 40 crore bounced.
Based on its investigation, ACB has registered a case under Prevention of Corruption Act against the management of Jammu and Kashmir Bank, the officers concerned and partners of the beneficiary firms among others.
Rather’s properties were raided by a team headed by DySP Mushtaq, who in turn assisted by Inspectors Kamal Sangra, Gulzar Ahmed and Bandeshwar Singh.