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Ignored lower bids, bought Mumbai building at Rs 100-cr loss — CBI’s charges against J&K Bank

According to FIR, bank purchased property ‘at a high price to confer undue benefit to vendor’, as part of ‘criminal conspiracy’ between its officials & owners of Akruti Gold Builders.

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New Delhi: Former officials of the Jammu and Kashmir (J&K) Bank are being probed by the Central Bureau of Investigation (CBI) in connection with the alleged purchase of a Mumbai property at an inflated price in 2010, while ignoring lower bids.   

The purchase was allegedly made to set up an integrated office for the bank, even though it already had sufficient space for operations in Mumbai.

The central agency has claimed that the bank bought a building in Mumbai’s Bandra Kurla Complex (BKC) from Akruti Gold Builders at a much higher rate than was offered by other shortlisted builders, incurring a loss of over Rs 100 crore. In doing so, the bank officials indulged in “criminal conspiracy” with the owners of Akruti Gold, the CBI has alleged.

J&K Bank is a nationalised bank that operates under the ownership of the Union Ministry of Finance. On Tuesday, a month after the Enforcement Directorate (ED) questioned National Conference vice-president and former J&K chief minister Omar Abdullah in connection with a separate corruption case allegedly involving the bank, the CBI raided eight locations in Jammu, Srinagar, and Mumbai. 

The raids were conducted in connection with a case lodged by the agency on 11 November last year over allegations of irregularities in J&K Bank’s purchase of the Akruti Gold building in 2010, the CBI said in a statement.

“Incriminating documents, articles and electronic evidence, several bank account details and bank locker keys have been recovered during searches,” the statement further said.

The residence of former J&K Bank chairman Haseeb Drabu was one of the sites searched by the CBI. Drabu had also served as finance minister during People’s Democratic Party (PDP) leader Mehbooba Mufti’s tenure as chief minister.

Properties of other members of the estate committee of the bank’s board of directors including A.K. Mehta, then executive director, and then directors Mohammed lbrahim Shahdad and Vikrant Kuthiala, were also searched. 

The agency had earlier conducted raids at various locations in Kolkata, Mumbai and Hyderabad in connection with the case.

Also Read: Why ED is accusing Amway of ‘pyramid fraud’, duping customers of ‘hard-earned money’

‘Criminal conspiracy’ between bank & owners of Akruti Gold

According to the CBI’s FIR, a copy of which is with ThePrint, J&K Bank purchased the property in BKC from Akruti Gold Builders “at a high price to confer undue benefit to the vendor”, as part of a “criminal conspiracy” between officials of the bank and owners of Akruti Gold. 

In November 2008, the bank had taken out an advertisement expressing interest in purchasing 20,000 sq. ft of office space in BKC. The advertisement received responses from 25 builders. From these responses, eight properties were shortlisted — Ashapura Builders (Hallmark Business Plaza), Topaz Akruti Crescenzo (BKC), Platina BKC, Naman Center, Golden Homeland Agencies (Wockhardt), Windsor and KRC Towers. 

Among the eight shortlisted offers, Ashapura Builders’ bid was the lowest at Rs 25,000 per sq ft. The FIR stated that in July 2009, Ashapura Builders wrote to the bank offering 30,000 sq. ft of space on the third floor of its building at Rs 22,500 per sq. ft. However, the contract wasn’t finalised, even though a committee was formed in this regard, it further said. 

In January 2010, the bank took out another advertisement for office space (25,000-30,000 sq. ft) and residential apartments in and around Andheri. This received responses from 23 bidders, and Ashapura was once again the lowest bidder. 

“It has been found that in the board of directors meeting held on 25 February, 2010, the director, estate committee briefed the board members about site inspections of the shortlisted properties conducted by the estate committee. The members were informed that among the shortlisted properties, Akruti Gold met the bank’s requirements,” the FIR said. 

In September 2010, J&K Bank made a deal with Akruti Gold for around Rs 180 crore. 

Bank on ACB, ED radar too

The Anti-Corruption Bureau (ACB), Jammu & Kashmir, too had previously filed multiple FIRs against the J&K Bank and its officials. The bank’s former chairman Parvez Ahmad Nengroo was arrested by the ACB in April last year, in connection with a case of illegal allotment of tenders for housekeeping, which led to the bank incurring losses worth crores.

Last August, the case was transferred to the CBI by the J&K government. The ED, meanwhile, initiated a money laundering probe into the allegations. In connection with this case, the ED questioned Omar Abdullah in April this year over appointments of directors at the bank, which has been under the scanner since 2019 for alleged irregularities in loans, appointments, and functioning. 

(Edited by Gitanjali Das)

Also Read: As CBI probes mystery of SBI’s missing coins worth over Rs 11 cr, here’s what its FIR states


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