The Central Bureau of Investigation has booked former Maruti Udyog Limited managing director Jagdish Khattar and Carnation Auto India, a company founded by him, for allegedly cheating the Punjab National Bank (PNB) of ₹110 crore.
On Monday, the agency conducted searches on the residential and official premises of Mr. Khattar and a chartered accountant. The FIR mentions him as the then director of Carnation Auto India.
Responding to the charge, Mr. Khattar on Wednesday said Carnation Auto India “unfortunately became a bona fide business failure on account of many reasons, including cartelisation by auto majors by non-supply of genuine parts.”
Forensic audit
In a statement, the former IAS official said the bankers had got a detailed forensic audit done by a leading independent auditor and nothing was found amiss. “Having found no lapses in operations or financial management, the bank has referred the matter to the CBI as a part of the process followed by them,” he said, adding that during searches, the agency found nothing incriminating.
“The company has not indulged in any wrongdoing,” said Mr. Khattar, adding that he would continue to fully cooperate with all the agencies. The company was earlier sold to the Mahindra Group.
After retirement from Maruti Udyog in 2007, Mr. Khattar had started Carnation Auto India in 2008, for which he got credit facilities sanctioned from the PNB in 2009. It was declared non-performing asset in September 2015, with effect from June 2012, the FIR says.
Breach of trust
It is alleged that the company and Mr. Khattar sold the goods pledged to the bank without its permission and diverted the funds, “thereby causing criminal breach of trust and cheating, causing wrongful loss to the bank and corresponding gain to themselves.”
The FIR states that the bank got a forensic audit done through K.G. Somani and Company, which reported that the accused borrower had fraudulently sold the fixed assets costing ₹66.92 crore for ₹4.55 crore without its approval. The funds so generated were not deposited with the bank.
The company extended loans and advances to its sister concerns, and the funds were misappropriated, the CBI alleges, stating that the role of bank officials would also be probed.
