Read And Share With All How Looter CMD of Bank Likely To Dismiss Whistleblower Who Informed Entire Story of Loot To RBI

Union leader Devidas Tuljapurkar faces victimisation and possible dismissal by the Bank of Maharashtra, as it suspects him of being the whistleblower behind a story in “The Hindu” on July 7, 2012.

For one unfortunate whistleblower, things have gone from verse to worse. Embarrassed by revelations about its curious dealings with corporate clients, the Bank of Maharashtra has declared war on whistleblowers. And since it can’t pinpoint them, the bank has gone after internal critics on novel grounds. It has chargesheeted a Union leader and ex-Director of the BoM for acts “prejudicial to the interests of the Bank.” That is, for publishing 19 years ago, a poem it calls ‘vulgar and obscene,’ in the Union’s in-house magazine, ‘Bulletin.’ That poem is the basis of the Bank’s charge sheet against a worker with an impeccable service record.

In 1984, the Marathi poet Vasant Dattatraya Gurjar wrote a satirical poem titled Gandhi Mala Bhetla Hota(Gandhi met me) which shook the literary world with its polemical content. In 2013, Devidas Tuljapurkar, General Secretary of the All-India Bank of Maharashtra Employees Federation, faces victimisation and possible dismissal by the bank, ostensibly because the Bulletin, of which he was editor, carried that poem in 1994!

The real reasons for going after Mr. Tuljapurkar appear to have little to do with poetry and seem far more prosaic. He has been a thorn in the flesh of his management. Both, as an alert employee and, for a while, as Workman Director on the bank’s Board. He has also drawn the RBI’s attention to the BoM’s odd handling of some corporate accounts and advances which, he charges, are being favoured at the expense of BoM’s main depositors — lakhs of small farmers, working people and retired employees. 

But the BoM leadership has something more against him. They suspect him — with no basis or proof — of being the whistleblower behinda story in The Hindu, July 7, 2012. That story exposed how the bank had granted a Rs. 150-crore loan to a defaulter owing BoM Rs. 40 crore by greatly weakening the terms of the original sanction letter. The defaulter company was a part of the United Breweries (UB) group headed by Vijay Mallya. The expose embarrassed Bank Chairman and Managing Director (CMD) Narendra Singh, sparking a whistleblower witch-hunt.

But no whistleblower was found. And after several transfers of senior officers within the bank, the search hit a dead-end. Ironically, it was an unthinking action of the Reserve Bank of India that handed the BoM management a scapegoat: Devidas Tuljapurkar.

Mr. Tuljapurkar told The Hindu, “Last October, I wrote a letter to RBI Governor D. Subba Rao highlighting questionable corporate advances and imprudent banking decisions of BoM at the instance of CMD Narendra Singh.” The letter, written in his capacity as a Union leader, was backed up with facts and documents. Having served as a Director on the Board of BoM from 2004 to 2009, he was very familiar with the rules and procedures.

However, the RBI failed to protect his identity as a whistleblower. In one of those unthinking acts of bureaucracy, the RBI routinely forwarded Mr. Tuljapurkar’s letter to the very BoM management that it exposed, for their comments. The bank had found its scapegoat and Mr. Tuljapurkar’s ordeal began. “Since I had written a letter to RBI, the management assumed that it was also I who had leaked that story about gifting a Rs. 150-crore loan to Mallya’s company. They wanted to corner me, so they started scanning my history,” he says.

And all they could come up with was a poem from 1984. Vasant Gurjar’s poem is a political satire that is scathing about the followers of Mahatma Gandhi who, in the poet’s view, were merely serving their own interests. In 1994, the poem was published in the ‘Bulletin’ the house magazine of the Union. In March 1995, an organisation called the ‘Patit Pavan Sanghatana’ filed a complaint against the Bulletin for publishing the ‘obscene’ and ‘vulgar’ poem. As editor of the Bulletin, Mr. Tuljapurkar was made an accused in the case.

This May 3, 19 years later, the BoM management issued an internal charge sheet against Mr. Tuljapurkar. It accuses him of ‘publishing such an inflammatory, vulgar, obscene and objectionable material in the magazine “Bulletin” meant for bank employees …” And claims that circulating that issue of the Bulletin on the BoM’s premises (in 1994) was “prejudicial to the interests of the Bank.”

Interestingly, the ‘State Performances Scrutiny Board, Government of Maharashtra’, headed by well-known Marathi poet F.M. Shinde, has a very different take on the poem. In January 2011 the Scrutiny Board made it clear that the poem is neither obscene nor vulgar. “What Gandhi had envisioned about Swarajya is nowhere to be seen. The poet has expressed this in satirical form,” Mr. Shinde had said.

Apart from ignoring the Board’s view, the BoM seems to take no notice of the Supreme Court’s order in the case against Mr. Tuljapurkar. “After the FIR in 1995, we approached both the sessions court and the High Court to discharge me from the case. But that was rejected and our appeal is pending in the Supreme Court,” he says. “The apex court, in its order dated July 7, 2010, stayed all proceedings in lower courts in this case and the actual trial has not even started in any court.”

The charge sheet accuses Mr. Tuljapurkar of not disclosing this pending litigation against him while serving as the Workman Director of the bank and for knowingly making ‘false statements’ in the forms of the bank. BoM CMD Narendra Singh took personal interest in the entire matter, says Mr. Tuljapurkar. The CMD placed the 19-year old case before the board meeting in January this year, recommending action against the union leader.

All this sidesteps the truth that Mr. Tuljapurkar’s name was mentioned in the FIR as editor of the Bulletin and not in any ‘personal capacity.’ It also ignores the fact that even charges in the case are yet to be framed. Calls, faxes and emails from The Hindu to Mr. Singh have so far drawn no response.

Meanwhile, an outraged All India Bank Employees’ Association (AIBEA), to which Mr. Tuljapurkar’s union is affiliated, has called for an agitation across the entire BoM on June 17. “We demand immediate withdrawal of the charge sheet slapped against him and thorough investigation of loans sanctioned by the bank to various corporates ever since the present chairman took charge,” CH. Venkatachalam, General Secretary, AIBEA, told The Hindu. He added that the BoM being a public sector bank, every citizen had a right to express concern about its financial health. “We shall fight back any attempt at victimisation.”

If the departmental inquiry against Mr. Tuljapurkar proceeds the way bank management wants, it could result in his dismissal. A whistleBusiness blower exposing the questionable actions of a public sector bank could be dismissed for publishing a poem in 1994. He is also a man who, while a director of the bank, transferred all the money he received as sitting charges for Board meetings to the Union’s account via cheque, accepting no monetary benefits as a director.

“I wrote to RBI because I found Mr. Singh’s financial moves unhealthy for the bank’s future. Hence I’m being targeted and victimised. They aim to make an example of me so nobody in future will dare raise his voice. It has to be stopped,” he said.

Mallya flies high despite Kingfisher

Written by P. SAINATH -----published   in    'THE HINDU' on 7th july 2012

Can a defaulter owing a public sector bank Rs. 40 crore persuade that bank to sanction him Rs. 150 crore in further loans before paying back a rupee? 

Can he get that bank to lower his debt to less than half of what he owed them? 

Can he have the terms of sanction amended repeatedly so that the personal guarantee demanded of him disappears?

 And can he get the bank to change the very purpose for which the loan was given?

Yes, if the defaulter is part of the United Breweries (UB) group headed by Vijay Mallya and the institution is Bank of Maharashtra (BoM). And it shouldn’t take more than two months. You can even get the first pay-out of your loan — before you have shown compliance with even its greatly weakened terms and conditions.

“There are fears within the bank that this Rs. 150 crore from BoM to a UB group company may really be about raising money for the group’s struggling airline, Kingfisher,” a whistleblower within the bank told The Hindu. “The changes in terms, conditions and purpose of the loan are worrying. And BoM might well sanction further amounts. This fund-raising drive is surely on in other banks, too. Which would explain the limited amounts from each of them.” Kingfisher has a debt of over Rs.7,000 crore and has not paid employees’ salaries for months. It has defaulted on tax payments and vendors complain of unpaid bills. BoM’s Rs. 150 crore (so far) will not dent a debt that size. But it could help raise desperately needed short-term working capital of Rs. 700-800 crore. A UB Group spokesperson, however, asserted that there was no “practice of inter-company funds diversion.”

On March 29 this year, BoM sanctioned a new loan of Rs. 100 crore to United Spirits, a UB group company. Aware that another UB Group concern, UB Engineering, still owed the bank money, BoM’s Credit Approval Committee (CAC) was initially cautious. The new loan could happen only “after repayment of full recompense amount of Rs. 40.60 crore to the satisfaction of the bank along with up to date interest in respect of dues of M/s UB Engineering Ltd ...”

By April 21, barely three weeks later, a new sanction letter had dropped mention of the Rs. 40.60 crore. Now, it was up to the bank's Recovery Department to “inform the amount of dues to be recovered from M/S UB Engineering” in line with the bank's recovery policy. By May 22, the amount sought to be recovered from UBE was down to Rs. 19.9 crore.

On March 29, the CAC had mandated that the loan to United Spirits be “utilized solely for future purchase (emphasis added) of casks (approx 1.28 lakhs) for maturation of spirits.” Also, “the bank would make payment directly to suppliers and vendors.” And no reimbursement would be allowed “in respect of assets already purchased.” This firmness, the BoM whistleblower told The Hindu, “arose from fears of the UB group diverting the money to Kingfisher.” Yet, by May 11, the firmness vanished. “Amount already spent on procurement of casks shall be allowed as margin towards promoter’s contribution,” said an amendment to the sanction. Nor would the bank deal directly with suppliers and vendors. “Necessary details such as original bills, present value of casks etc. in respect of casks already procured (emphasis added) should be obtained and held on record.” That, scoffs a banker, “means bills for stuff purchased ages ago might be used to show compliance with the loan terms and conditions. Perhaps no actual rule is broken. But the bank changing its own condition to ‘already procured,’ raises worries.”

The Hindu sent an email to BoM Chairman & Managing Director Narendra Singh, raising some of these issues. To which the Bank’s Chief Law Officer responded: “We cannot divulge any information relating to the affairs of any of our constituents.” This was “in view of the Bank’s legal obligation to maintain confidentiality and secrecy of its constituents accounts.” As required under “Section 13 of the Banking Companies (Acquisition & Transfer of Undertakings) Act 1970.” Given that one of the queries was simply whether all RBI directives had been followed in making the loans, the secrecy argument appears redundant.

By June 21, the amended purpose of the loan read: “For CAPEX (capital expenditure) requirement of the company for ongoing expansion (total project cost Rs. 1078 crores).” The strict original purpose had been drowned in a broader project. The loans have so far seen one sanction letter cancelled and a second one amended four times.

On March 29, the bank called for a ‘Personal Guarantee’ from Mr. Mallya as part of the deal. It also sought a ‘Corporate Guarantee’ from Four Seasons Wines Ltd (a UB Group company) and from United Breweries Holdings itself. It required the “latest net worth details of Mr Mallya be obtained before disbursement and it should be satisfactory.” By April 21, the ‘personal guarantee’ condition had vanished. Nor was one required from UB Holdings Ltd any longer. A guarantee from just Four Seasons Wines would be enough.

The Bank of Maharashtra grew more generous by the week. The March 29 sanction had required Credit Reports (CRs) from all other banks dealing with the borrower company/group. (The 18-bank consortium of lenders to Kingfisher Airlines includes 14 public sector banks). This was to certify “satisfactory dealings with respective banks prior to disbursement” of the loan. By April 21, the CR was to certify “satisfactory dealings” of group companies “other than Kingfisher Airlines” with the banks, prior to loan disbursement. The new letter sanctioned a further Rs. 50 crore loan beyond the original one of Rs. 100 crore.

On May 11, the bank further amended the sanction terms. Now the borrower was only required to obtain the credit report “within 90 days from 1st disbursement.” Likewise, the borrower was given 90 days after first disbursement to produce No-Objection Certificates (NOCs) from all other banks dealing with the Group “in respect of existing working capital and Term Loan lenders.”

In other words, alleged a BoM whistleblower: “We give them money before they fulfil any loan conditions. And the Rs. 50 crore looks like a hand-out to pay off the money earlier owed. This may not end at Rs. 150 crore. There might be further loans soon.”

The April 21 sanction letter stressed that the Rs. 150 crore “should not be utilised for extending loans to subsidiary companies / associates or for making inter-corporate deposits.” It sought a ‘suitable undertaking’ from the company to this effect. “They were still worrying about diversions to Kingfisher,” says a bank official. They soon stopped worrying. By May 11, this condition was: “Waived.”

In April, the borrower was forbidden from effecting “any change in their capital structure” without “prior approval of the bank in writing.” They were not to undertake mergers, new projects or expansion without the bank’s consent. By May 11, the company was merely required to “keep the bank informed in writing” of any such changes. The Bank’s consent was no longer needed.

Replying to a questionnaire from The Hindu, a UB Group spokesperson said that “BoM sanctioned a loan of Rs 150 crores on terms and conditions comparable to loans taken by United Spirits Ltd from other nationalised banks after due negotiations.” The reply confirms that the drive involves other banks, too, (see box). Such as the Punjab National Bank. The spokesperson claimed the “sacrifice amount” made by the Bank of Maharashtra was no more than Rs. 17.43 crores and part of a legitimate one-time settlement.

Most importantly, the UB Group Spokesperson asserted that: “USL does not follow any practice of inter-company funds diversion. In particular, USL has not lent any funds whatsoever to Kingfisher Airlines.” Why, then, has Bank of Maharashtra exempted Kingfisher airlines while seeking proof of “satisfactory dealings” of group companies? The Bank’s Law Officer pleads “confidentiality and secrecy.”

“This isn’t about just one but many public sector banks, involving hundreds of crores — more public money than we know about,” says the Bank of Maharashtra whistleblower. “On the one hand, media reports speak of lenders turning the screws on Kingfisher. On the other, UB Group companies seem to be able to get money, perhaps even from the same lenders, on terms defaulters can’t get. The total amount could be startlingly large - as also the risks involved for the banks.”

“The Bank of Maharashtra has lakhs of farmers, working people and retired employees amongst its depositors,” the whistleblower added. “We are called the common man’s bank. The farmers — routinely blamed for our NPAs — today struggle to get tiny amounts as loans. But big corporations like UB get hundreds of crores in weeks in a manner most risky to the bank. And these kinds of deals won’t figure in our discussions of NPAs.” 

http://www.thehindu.com/news/national/mallya-flies-high-despite-kingfisher/article3610715.ece

Suspension of General Manager in Indian Bank

http://www.expressindia.com/latest-news/Locked-out-of-car-Indian-Bank-CMD-slams-door-on-regional-head/795179/



The incident of General Manager Indian Bank suspension for an accidental mistake in flattery is not uncommon in banking industry. Every day numerous officers in banking industry are transferred to remote and critical place only because he or she did not flatter well to his or her boss. Not only this, officers who fail to satisfy their bosses by gifts and unrestricted flattery are rejected in promotion processes. Whimsical transfer and arbitrary promotion superseding several senior and experienced officers is the well accepted tradition in public sector banks. 

http://dkjain4970921032007.blogspot.in/2011/12/suspension-of-general-manager-in-indian.html