After Kingfisher, CBI shifts focus to Winsome loan default case

“Banks have not done proper due diligence before giving loans to Winsome and Forever,” a source told Moneycontrol.

“More than 50 percent of Winsome’s exports are to six companies with a common owner. Bankers should have looked into this aspect before sanctioning the loans,” the source said. 

Winsome promoter Jatin Mehta told the banks that his major clients had defaulted on payments, in turn, making it difficult for his company to repay the loans.

However, investigations have revealed that the customers to which Winsome was exporting, had been incorporated as recently as 2012. Speculation is that the promoter of Winsome, Jatin Mehta has siphoned off the money using fictitious customers as fronts, and stashed away the money abroad.

Once the chargesheet is filed, CBI will start the process for seeking extradition of Jatin Mehta. According to media reports quoting investigators, Mehta and his wife have given up Indian citizenship and become citizens of the Federation of St Kitts and Nevis, which does not have an extradition treaty with India. But Mehta is currently based in Dubai, the reports say.

The CBI has been criticized by IDBI Bank staffers, including ex-CMD Yogesh Aggarwal, as many lending decisions at state-owned banks are taken under political pressure. Also, many bankers say that not every case of loan default is due to corruption and negligence; a weak business environment, too, is to blame.

Senior bankers feel such arrests could hurt loan sanctions as bank officials may become extra cautious, fearing allegations of corruption later on.

However, CBI officials say they have evidence that the loan officers did not do the required due diligence in the cases involving Kingfisher Airlines, Winsome Diamonds and others as well.

“Often the banks did not come forward to register complaints against defaulters as they were worried that their own faults would be exposed,” the source said.