United India’s two CBI complaints on loan defaults – with a difference

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Chennai, March 28 (IANS) A curious difference could be seen in the two complaints – one filed this year and the other in 2017 – by government-owned United India Insurance Company with the Central Bureau of Investigation (CBI) relating to loan defaults.

While both the complaints are for cheating of funds, the 2018 complaint includes credit rating agency CARE Ratings Ltd represented by its Managing Director Rajesh Mokashi as co-conspirator in its complaint against Deccan Chronicle Holdings Ltd in 2018, while this agency was not mentioned in its 2017 complaint against First Leasing Company of India Ltd.

“The inclusing of CARE Ratings may be to get their views and the role played by them,” an official of United India told IANS preferring anonymity.

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CARE Ratings official declined to comment on the FIR lodged against its Managing Director.

As per the FIR, United India has not done any separate risk analysis/due diligence and depended only on the rating given by CARE Ratings while investing Rs 30 crore in Deccan Chronicle Holdings’ 11.25 per cent unsecured redeemable non-convertible debentures.

At the time of investment by United India in 2011, the credit rating given by CARE Ratings for Deccan Chronicle Holding was PR1+ and at the time of redemption-in 2012- the rating was drastically downgraded to ‘D’ that is within a span of one year, the FIR said.

On the date of maturity, the principal and the interest were not paid by Deccan Chronical Holdings. The three cheques issued by Deccan Chronicle Holdings for Rs 10 crore each bounced.

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The insurer also charged two of its employees – A.Balasubramanian and K.L.Kunjilwar – for fraud.

United India in its complaint against First Leasing in 2012, while charging its two employees, the borrower (First Leasing), A.C.Muthiah, Chairman, First Leasing and Farouk M Irani, Managing Director, First Leasing did not include credit rating agencies Brick Works and CARE Ratings.

According to FIR, United India invested Rs.15 crore in the 5.3 years 12 per cent unsecured redeemable non-convertible debentures of First Leasing based on ‘AA’ rating given by Brick Work in 2012.

CARE Ratings in fact had downgraded the rating for First Leasing in 2014 to ‘C’ and shown it as unapproved.

–IANS

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