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CORPORATE SCAMSc
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Ms. Rajeswari Menon
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-c The CBI had on 24 Nov busted the housing-finance racket and arrested
eight top officials from banks and financial firms, on charges of taking
bribes to grant corporate loans.

-c Officers of top management and middle management of various public

sector banks and financial institutions viz. Bank of India, Central Bank of
India, Punjab National Bank, LIC and LIC Housing Finance Ltd were
receiving illegal gratifications from the private financial services
company who were acting as mediators and facilitators for corp orate
loans and other facilities from financial institutions .

-c The top executives of these banks were arrested along with the top
executives of the Mumbai -based Money Matters Financial Services.

-c The biggest area of concern was that these officials were accused of
giving loans to companies in return for monetary benefits from a city
based financial services company, Money Matters, said to be associated
with top real estate firms.

-c The investigation were started with the CBI began to look into
investments of the banks and the housing finance co mpany in Money
Matters which involved investment of Rs 445 cr ores in October by
qualified institutional placement (QIP).

 9 
 

-c The Central Bureau of Investigation arrested CEO of LIC Housing
Finance Ramachandran Nair and seven others including three top
officials of public sector banks in connection with an alleged housing
finance racket.

-c Apart from Nair, those who were arrested were Naresh K Chopra,
secretary (investment), LIC; R N Tayal, general ma nager of Bank of
India (Delhi); Maninder Singh Johar, director (chartered accountant) of
Central Bank of

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 India; and Venkoba Gujjal, deputy general manager, Punjab National
Bank (Delhi).

-c Rajesh Sharma, Chairman and Managing Director of Mumbai -based firm

Money Matters Ltd and two of its employees -- Suresh Gattani and
Sanjay Sharma -- were among those arrested.

-c CBI has named several real estate developers in the first information
report. These include Mantri Realty, Kumar Developers, DB Realty,
Emaar MGF and Lavasa Corporation.

-c The Reserve Bank of India has also joined the CBI in probing the
µbribes-for-loans¶ scandal involving at least 15 companies, in an attempt
to prevent loans given to them from burning a hole in lenders¶ books.


V 
-c Shares of LIC housing dropped by 18.32%.

-c The Bombay Stock Exchange benchmark ed that Sensex slipped 232

points in a highly volatile trade, with banking and realty stocks taking a
big hit on reports of the housing scam.

-c The credibility of the company was up at stake after two top officials of
the insurance behemoth and its group company was arrested by the CBI
on bribery charges.

 
-c LIC chairman TS Vijayan has assured the stakeholders that this was not a
scam involving LIC; rather it was a bribery case that involved senior LIC
officials.

-c They said that steps would be taken to ensure that interests of various
stakeholders including investors, customers and business associates are
protected.
-c SEBI may take action if scam affects the stock market.

-c LIC Chairman T S Vijayan announced that V K Sharma will take over as

the CEO of its housing finance.

-c As per Jan 2011, LIC Housing Finance clocked 39 per cent rise in net
profit at Rs 213.4 crores for the third quarter ended December, 2010.
Higher demand for loans and a one-time income from the sale of its
investment in IL&FS pushed up profit.