Bank of Maharashtra CEO Ravindra Marathe arrested in Rs 2,043 crore fraud case
The Economics Offences Wing of the Pune Police have arrested Ravindra Marathe, the CEO and MD of Bank of Maharashtra, his predecessor Sunil Muhnot and others for alleged disbursement of Rs. 2,043 crore as loans to DSK developers limited.
Marathe was arrested from Pune while Muhnot was held in Jaipur. The others arrested are Executive director Rajendra Gupta, Zonal manager Nityanand Deshpande, DSK’s CA and statutory auditor Sunil Ghatpande and DSKDL chief engineer and VP Rajiv Newaskar.
What is the fraud?
The Rs 2,043 crore fraud relates to siphoning of money raised by the DSK group through investors as well as loans from banks and financial institutions, non-convertible debentures and money collected from home buyers in housing projects.
Pune EoW sources claimed that bank officials misused their positions to sanction loans worth Rs 60 crore in two tranches. They alleged DSK Group diverted the loans for personal use including renovating promoter’s house.
“Bank officers colluded with DSK Developers by misusing their power and authority with dishonest and fraudulent intention to sanction and disburse the loan which was siphoned off,” the Pune EoW said in a statement.
As per the charge sheet filed in May, the total scam is worth Rs 2,043.18 crore wherein the accused 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 fixed deposits.
Of the total scam amount, the deposit and loan fraud is 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 of Rs 136.77 crore
The arrest came after a local RTI activist Vijay Kumbhar sought details of the loans sanctioned to the developer.
Police sources say, that verification of various collateral submitted by DSK group resulted in the detection of the bank fraud.
Bank of Maharashtra said in a statement that the lender’s “total outstanding exposure to DS Kulkarni Developers Ltd. is to the tune of Rs 94.52 crore which is fully secured by primary and collateral securities. Recovery process like SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act) has already been initiated by the Bank and some of the properties are due for auction.” The bank has also declared DSK Developers and its promoters as wilful defaulters, the statement added.
More than 12,000 home buyers, investors, depositors have been duped by DSK. Nearly 8000 senior citizens have lost their life savings, investing in DSK’s fixed deposit.
The builder DS Kulkarni, his wife Hemant, son Shirish and other relatives have already been arrested for defrauding home buyers who booked flats in several projects of the company.