CBI to grill ex-UCO bank CMD for graft

CBI to grill ex-UCO bank CMD for graft

Shares of UCO Bank plunged almost 18% in morning trade after the CBI booked Arun Kaul, former chairman-cum-managing director of the lender, and others in connection with an alleged Rs 621-crore loan fraud. Bombay Stock Exchange or BSE has sought clarification from UCO Bank on this matter, According to Reuters, CBI said officials at the bank had colluded with private infrastructure firm Era Engineering Infra, and investment banking firm Altius Finserve Pvt to siphon bank loans.

In a complaint filed by the bank, it is alleged that two loans worth Rs 200 crore and Rs 450 crore were given which were then diverted by these companies and not used for the purposes for which they were issued.

On 14 April, CBI booked Kaul and others in connection with an alleged Rs 621-crore loan fraud which has caused a loss of over Rs737 crore to the bank.

Shares of the Kolkata-based UCO Bank saw its biggest drop in over a decade after the Central Bureau of Investigation (CBI) booked the bank's former chairman Arun Kaul for allegedly cheating the bank.

The CBI said the loan was secured by producing false end-use certificates issued by the chartered accountants and by fabricating business data and it was not utilised for the sanctioned objective.

The Rs 200 crore loan was issued for repayment of high cost debt to the Central Bank of India, Punjab National Bank and IFCI.

"No amount was used to repay the dues of Central Bank of India and Punjab National Bank while only Rs 5.9 million were repaid towards dues of IFCI while objective of the loan was to repay the dues of these banks", it said. The agency also booked a few chartered accountants in connection with the case Saturday.

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