IDBI Bank has accused AC Muthiah of being a "wilful defaulter" after a company, which he co-promoted, failed to repay a loan of Rs 508 crore to the private lender.
In a public note, the bank said, First Leasing Company of India, promoted by the Muthiah and Farouk Irani, is in default of over Rs 508 crore as on August 27.
Moneycontrol could not get a comment from the former chairman of the MAC group of companies.
As the name suggests, First Leasing Company of India was the first company in India to undertake leasing of assets. The company came under the scanner after a series of fund diversions which led to multiple law enforcement agencies, including the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) to investigate the firm's operations.
In August 2016, the ED had arrested Farouk Irani, under the provisions of the Prevention of Money Laundering Act in an alleged bank loan fraud case of about Rs 500 crore.
The law enforcement agency had begun a criminal investigation based on CBI's FIR, filed a year earlier, which booked Irani and the Chennai-based firm for allegedly cheating IDBI Bank and SBI to the tune of Rs 274 crore and Rs 248 crore, respectively.
In June 2018, the CBI filed a chargesheet against Muthiah and Irani for causing a loss of Rs 102.87 crore to Syndicate Bank.
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