Chennai, May 10 (IANS): The demand for a through probe by the Central Bureau of Investigation (CBI) into the role of bankers in the Rs 450 crore loan sanctioned in the name of farmers, which was credited, instead, to Thiru Arooran Sugars Ltd, has been raised here by a major bank union official and a senior politician.

The Pattali Makkal Katchi (PMK) Founder S. Ramadoss in a statement on Friday also demanded nationalisation the company in question.

"There should be a CBI probe and the two sugar companies should be nationalised," Ramadoss said.

"Sanctioning loan in the name of the farmers and crediting the amount to the company's account could not have happened without the involvement of top officials of the bank. There should be a CBI probe into this," All India Bank Employees' Association (AIBEA) General Secretary C.H. Venkatachalam told IANS on Friday.

According to Ramadoss, officials of the company, which has sugar mills in Thanjavur and Cuddalore districts, obtained signatures of farmers on some forms on the false pretext that these were needed for settling their cane arrears, and secured loans from nationalised and private banks to the tune of about Rs 450 crore.

The loan amount was credited to the company account and the issue came to light when the farmers received notices from the banks for loan repayment.

Meanwhile, the state police has arrested the Thiru Arooran Sugars Chairman R.V. Tyagarajan.

The farmers, who had supplied sugarcane to the company, said they had not been paid for their supplies for a long time.