Jagdish Khattar, who once headed the country’s top auto major Maruti, has been named as an accused by the Central Bureau of Investigation in a cheating case linked to a Rs 110 crore bank loan taken from the Punjab National Bank. The loan was taken by a company that Khattar, 77, started in 2008 after his exit from Maruti.
The FIR filed by the CBI on Friday, 20 December. Also, his house searched on Monday, a CBI official said.
According to the FIR, M/s Carnation Auto India Pvt Ltd, a company set up by Jagdish Khattar had taken a Rs 170 crore loan from Punjab National Bank in 2009. The loan, which had been subsequently restricted to Rs 110 crore, was declared a non-performing asset in September 2015.
The accusation against Khattar and the company is that they had “dishonestly and fraudulently” cheated the bank by selling goods hypothecated to the bank without its permission and diverted the funds.
Jagdish Khattar, ex Maruti chief accused by the Central Bureau of Investigation in a cheating case
The PNB’s Tolstoy House branch had filed a complaint against Khatter and his company on October 17 this year following which the case has been lodged.
The FIR said a forensic audit by the bank had revealed that Khattar’s company sold assets worth Rs 66.92 crore. However, which furnished as security, had been quietly sold for Rs 4.55 crore. “It has committed misappropriation of bank funds. Also, put them for own use,” it said.
Khattar denied the allegations. “Carnation is a bonafide business failure. There is no wrongdoing. A detailed forensic audit conducted earlier this year. Also, by a leading independent auditor and nothing amiss found. The Bank now referred it to CBI as a part of the process followed by them. The search conducted by CBI but nothing incriminating found. We vindicate once the investigation is completed,” Jagdish Khattar told HT.
Jagdish Khattar quit Maruti Suzuki India Ltd after an eight-year stint as managing director that saw Maruti establish itself as India’s largest car company. He launched Carnation Auto the next year with the idea of setting up multi-brand car dealerships for new cars and service outlets across the country. That idea never took off.
According to a Mint report, Carnation’s cumulative losses from 2009-10 to 2013-14 stood at Rs 278 crore. The losses had wiped out investments by private equity firms— Rs 104 crore by Premji Invest and IFCI Ventures and Rs 84 crore by Gaja Trustee Co. Pvt. Ltd.