Corporation Bank offered disproportionate overdraft facility to Vadra
It was recently disclosed that the public sector Corporation Bank had offered an overdraft facility of Rs 7.94 crore in 2007-2008 to Robert Vadra's Sky Light Hospitality when the company's issued capital was Rs. 1 lakh.
Investigators and bank officials are now trying to determine the circumstances in which the overdraft was offered and whether it conforms bank's rules and regulations relating to offering overdrafts to companies. A report in the Business Standard on Wednesday showed details of the overdraft. It is not knwn if any collateral of the Sky Light was kept with the bank for securing the huge overdraft.
It was known that the first installment for the purchase of a piece of land valued at Rs 15.38 crore in Manesar, Haryana was taken from the overdraft facility and was returned later in the year. The same piece of land was sold by Mr. Vadra to DLF for Rs 58 crore.
Ajai Kumar, Chairman and Managing Director, Corporation Bank said that he cannt answer the question about how much overdraft is offered by the bank to companies with an issued capital of 1 lack rupees as he as not ascertained the facts. He added that he will not disclose that information even after securing more details due to the confidentiality.
B. K. Divakara, General Manager for Credit at Corporation Bank said, "As of date, we have no liability from that person. It was two to three years ago. No one is aware who was there that time. We have to take up the details."