The Mumbai Police’s Economic Offences Wing (EOW) has summoned the Managing Director and Chief Executive Officer of an asset reconstruction company (ARC) to provide a statement in connection with the alleged Rs 122 crore embezzlement case at New India Cooperative Bank, PTI reports.
According to officials cited by PTI, the EOW has uncovered that several non-performing assets (NPAs) linked to the bank had been sold to the said ARC. However, discrepancies arose when the recovery amounts received by the bank were found to be significantly lower than the original loan values.
“In certain instances, the value realised by the bank post-sale was alarmingly low. For example, in one particular case, the loan extended amounted to Rs 30 crore, but the bank received only Rs 2 to Rs 3 crore following the disposal of the mortgaged property via the ARC,” a senior official told PTI.
The official further stated that to investigate the reasons behind the stark undervaluation and assess whether proper protocols were followed, the EOW has called upon senior officials of Omkara ARC for questioning. Although a specific date has not been confirmed, the MD and CEO are expected to appear within the week.
Meanwhile, in a formal statement issued to the press, Omkara ARC maintained that the assets under scrutiny had been acquired in strict accordance with the law. “Omkara ARC adheres to the highest levels of transparency and operates under a tightly regulated framework. The NPAs referred to were acquired through a legally mandated public auction process, where asset quality and prevailing market conditions dictate valuations,” the company stated.
The firm also added that it had not received any official communication from the EOW as of now. “Nevertheless, we are fully prepared to cooperate with any process that promotes transparency and reinforces institutional trust. We have complete confidence in the authorities and believe the facts will speak for themselves,” the statement added.
Asset reconstruction companies are specialised financial institutions that purchase bad loans or NPAs from banks and other financial entities, with the aim of recovering dues through legal and market-driven mechanisms.
(With inputs from PTI)
