CBI Arrests CEO of LIC, Unearths Housing Finance Racket


CBI Arrests CEO of LIC, Unearths Housing Finance Racket

Mumbai, Nov 24 (PTI): The CBI today arrested CEO of LIC Housing Finance Ramachandran Nair and seven others including three top officials of public sector banks in connection with an alleged housing finance racket.

Apart from Nair, those arrested are Naresh K Chopra, Secretary (Investment), LIC, R N Tayal, General Manager of Bank of India (Delhi), Maninder Singh Johar, Director (Chartered Accountant) of Central Bank of India, Venkoba Gujjal and Deputy General Manager of Punjab National Bank (Delhi).

Rajesh Sharma, Chairman and Managing Director of Mumbai-based firm Money Matters Ltd and two of its employees -- Suresh Gattani and Sanjay Sharma-- were among those arrested, CBI said.

The officials allegedly colluded with the firm to sanction large scale corporate loans, overriding mandatory conditions for such approvals along with other irregularities. "The CBI has busted a racket wherein a private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans," CBI spokesman R K Gaur said in a statement.

"Officers of top management and middle management of various public sector banks and financial institutions viz. Bank of India, Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance Ltd were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions," he said.

"They were also gathering confidential business information from financial institutions," Gaur said. Searches were conducted at various locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar, which have resulted in seizure of incriminating documents. The CBI has registered five separate cases in this regard and investigation is in progress, the spokesman said.


All procedures were followed while approving loans:LIC Housing

Hours after the CBI arrested its CEO in connection with an alleged housing finance racket, LIC Housing Finance today said it had followed all necessary procedures while approving loans.

"All procedures and due diligence consistent with Board approved guidelines have been adhered to in approving the loans, as has been followed in the past, by the competent authority," LIC Housing Finance Ltd  said in a statement.

CBI arrested the company's CEO Ramachandran Nair and seven others, including three top officials of public sector banks, in connection with an alleged housing finance racket. Apart from Nair, those arrested are Naresh K Chopra, Secretary (Investment), LIC, R N Tayal, General Manager of Bank of India (Delhi), Maninder Singh Johar, Director (Chartered Accountant) of Central Bank of India, Venkoba Gujjal and Deputy General Manager of Punjab National Bank (Delhi).

Rajesh Sharma, CMD of Mumbai-based firm Money Matters Ltd and two of its employees -- Suresh Gattani and Sanjay Sharma-- were among those arrested, CBI said.
The officials allegedly colluded with the firm to sanction large scale corporate loans, overriding mandatory conditions for such approvals along with other irregularities.

LIC Housing Finance said, "All the loans are secured by the underlying assets to the full satisfaction of the approving authority. All the loans have been approved with relevant regulatory norms."

It said that steps would be taken to ensure that interests of various stakeholders including investors, customers and business associates are protected.
"As on date all the loans in question are performing assets," LIC Housing Finance said. It added builders' loans constitute 11.34 per cent of the total loan portfolio as on October 31 this year and the gross non-performing assets of the organisation was 0.08 per cent.

"Gross NPAs on the individual loans stood at 0.84 per cent as on October 31, 2010," the company said. Earlier in the day, CBI spokesperson R K Gaur said, "Officers of top management and middle management of various public sector banks and financial institutions viz. BoI, Central Bank of India, PNB, LIC and LICHF were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions".

He added, "They were also gathering confidential business information from financial institutions." CBI conducted searches in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar, resulting in seizure of incriminating documents. It has registered five separate cases.

  

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Comment on this article

  • A.S.Mathew, U.S.A.

    Thu, Nov 25 2010

    Investing money in the Indian LIC is like a term-time gamble but paying a very high premium.

    The high pressuring agents and their superiors use these words "risk" and "bonus", then tell the
    story of somebody who died after paying three premiums to enroll the unsuspecting public. Hardly
    none of the policy holders read the details of the policy before signing on the dotted lines.

    The top people, and the vast net work of employees earning a very high salary through the LIC, but
    the policy holders are at a lost if they collect the money through the maturity of the policy.

    Since many of my relatives are working with the LIC, so I know certain reality of this business.

    DisAgree Agree Reply Report Abuse

  • Bulsam, Mangalore

    Thu, Nov 25 2010

    All our Govt Undertaking Companies are stuck with white-collars of old mentally with the tendency to take big cuts through their person touts for all dealings or stop them with red-tapism.
    Give all these highly corrupt white-collar oldies a voluntary retirement and bring in young blood of very high qualifications including gold medalists. The whole Govt sector will transform into a very high profit making companies.
    If the CBI and Lokayukta investigate the CEOs and a dozen duties of each Govt Undertaking Companies, they will get a shock of their life that how much they were looting the public money all these years.

    DisAgree Agree Reply Report Abuse

  • Clive, Kuwait

    Thu, Nov 25 2010

    LIC did well in the past bcos there were no competitors. But with so much capital, the big bosses in LIC thought why not make a quick buck by sanctioning big amounts to the other rogue organisations who will either default or bankruptcy some day. This way, the money of the people will go down the drain and one day LIC too will go the way other govt. units went. Time Govt gave strict punishment to these crooks.

    DisAgree Agree Reply Report Abuse

  • Sampath, Mlore/ Blore

    Wed, Nov 24 2010

    When the Corrupt CM inspite of agreeing the scam can still continue in the Post whats wrong in this man... After all both have eaten the our money and it have been useless giving Complaints the only solution is Govt must legalise corruption( who knows one day even that may be true)

    DisAgree Agree Reply Report Abuse

  • rubin, dubai

    Wed, Nov 24 2010

    this is your money which invested in lic funds,insurance etc

    DisAgree Agree Reply Report Abuse

  • felix moras, Mangalore

    Wed, Nov 24 2010

    Private Insurance Companies are far better than LIC…
    even in terms of giving the profit share…….

    DisAgree Agree Reply Report Abuse

  • Santhosh Rego, Uppoor/Dubai

    Wed, Nov 24 2010

    This is the reason L.I.C OF India always give less returns to policyholders than their competitors.

    DisAgree Agree Reply Report Abuse

  • lesly, u.s.a

    Wed, Nov 24 2010

    Top to bottom all chors in L.I.C. ?

    DisAgree Agree Reply Report Abuse


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