The Anti Corruption Bureau (ACB) in Jammu and Kashmir has unearthed several blatant wrongdoings at J&K Bank during the tenure of former Chairman and CEO Parvez Ahmed after his ignominious removal on June 8.
Officials said on Saturday that his removal followed charges of corruption and nepotism. Besides, the Income Tax Department has been conducting search and seizure operations in Srinagar, Bengaluru, Gurugram and New Delhi to investigate the charges and collect evidence.
Ahmed was appointed as Chairman and CEO of J&K Bank in October 2016 and his tenure was to end in a few months. The state government holds 59 per cent stake in the bank.
On the basis of probe so far, officials said J&K Bank gave huge loans against insufficient collateral to several entities. The bank sanctioned a loan more than Rs 50 crore to an automobile company based out of Gurugram. This was done without any due diligence against a collateral of only Rs 8 crore.
This company had borrowed more than Rs 200 crore from HDFC Bank, ICICI Bank, Canara Bank, J&K Bank and Volkswagen Finance to purchase new cars, demo cars, used cars and spare parts. It is alleged that a high-end SUV was given as to a senior manager at JK Bank in return.
Ahmed reportedly made hundreds of appointments on recommendation from various quarters, including political parties in power. At least three of his own relatives were appointed without following any transparent recruitment process. Officials said Ahmed posted his relatives in critical positions at the bank’s human resource department.
On June 11, the Income Tax Department conducted search and seizure operations on a prominent business group based in Srinagar. The operations covered eight premises in Srinagar, one in Bengaluru and one in New Delhi. The business group is engaged in the business of transportation, manufacturing of silk yarn, hospitality, retail trading of Kashmiri arts and crafts.
None of the senior officials members at the group is regular in filing their income tax returns, officials said. The group got its loan of Rs 170 crore from J&K Bank ‘restructured’ for a sum of Rs 77 crore, of which only Rs 50.34 crore has been repaid and the balance Rs 27.66 crore is still pending.
Evidence collected indicates that one-time settlement of the loan from J&K Bank was done in connivance of a senior bank officer who had got many out-of-turn promotions under Ahmed’s tenure.
Income tax officials have also unearthed documents which indicate that the repayment of Rs 50.34 crore pertaining to the loan was greenfielded by J&K Bank by granting another loan of similar amount to an associate, who has confessed to his role in layering the entire transaction.
Other documents recovered show sale of an undisclosed property worth Rs 22 crore, agreement to sell transport business for Rs 9.10 crore, undisclosed profit of Rs 15 crore to 20 crore while selling a cold storage plant at Lassipora after claiming government subsidy, undisclosed properties at Sonmarg (worth Rs 2.68 crore), Pahalgam (Rs 3.55 crore), Bengaluru (Rs 1 crore) and a shop in New Delhi (Rs 1.02 crore).
Officials are also analysing digital records seized during the searches.