JK Bank’s Mumbai Acquisition: CBI Raids Eight Locations, One Ex Director Already In Custody

SRINAGAR: After a preliminary enquiry conducted by the Anti-Corruption Bureau (ACB) of Jammu and Kashmir, the Enforcement Directorate and CBI are investigating the JK Bank’s prime purchase in Mumbai.

National Business Centre of J&K Bank in Mumbai.

The premises that house its Mumbai office was reportedly purchased for Rs 180 crore in 2010. ACB has reportedly found that the bank did not require so much space and that the lowest bidder was not taken into account.

A local news gatherer KNO reported that ACB investigations revealed that on November 6, 2008, an advertisement was issued by the JK Bank for purchasing 20000 sq ft integrated office premises at Bandra Kurla, Mumbai. It got 25 builders in response and a committee was constituted for the task and shortlisted eight buildings. “The spot inspection of the shortlisted properties was conducted on 13.12.2008 by a high-level committee of J&K Bank. Amongst these eight parties, the rates offered by Ashapura Builders (Hallmark Business Plaza) were the lowest (Rs 25000 per square feet),” reads the ACB documents, according to the news agency.

On July 28, 2009, a letter was received by the JK Bank from M/S Ashapura Builders indicating therein its willingness to offer 3rd floor of the building measuring 30000 square feet built-up area @ Rs 22,500 per sq ft chargeable area.

A committee was constituted with the approval of the chairman to take a view with regard to the offer received. “The committee so constituted has done nothing in respect of offers received especially on the application of M/S Ashapura Builders,” the ACB report reveals.

The ACB enquiry further revealed that upon directions of corporate headquarters JK Bank, the zonal head Mumbai published another advertisement on January 14, 2010, wherein it was mentioned that JK Bank required premises on outright purchase basis having office space comprising of about 25000-30000 sq ft and residential flats in or around Andheri (15 single BHK 600-800 square feet and 10 double BHK 1000-1200 square feet).

Subsequently, 23 offers were received and M/S Ashapura Builders was again quoted the lowest rate @ Rs 25,000 per square feet.“It has been found that no heed once again was paid to the lowest rates offered by the said builder,” reads the anti-graft body’s report.

On February 25, 2010, it has been found that in the board of directors meeting, the director estate committee briefed board members about site inspections of the shortlisted properties conducted by the estates’ committee.  “The members were informed that among the shortlisted properties, Akruti Gold BKC meets requirements of the bank. He further informed the members that total chargeable area of the entire building was around 42000 square feet area and the rate quoted for the sale was Rs 26000 per square feet area which roughly works out to Rs 109 crores for the entire building and Rs 73 crores for the proposal six floors. The members of the Board accorded approval to the proposal and decided that Bank should enter into negotiations with the builders on purchasing entire building. Accordingly, negotiations were held with the builder Akruti Gold BKC and finally the rate was finalized @ Rs 26000 per square feet for nine floors having total chargeable area of 63776 square feet.  A letter of intent was signed with the builder and a token money of Rs 25 Crores was paid to developer Vishal Techno Commerce Limited, “reads the report.

An enquiry conducted has revealed that there was sufficient space available with JK Bank for the functioning of Branch Bandra Kurla, Zonal Office and Treasury, as such there was no requirement of purchasing any additional accommodation.

It was on basis of this preliminary investigation, the news gatherer said that the CBI has taken over the case. On Tuesday, CBI carried out searches at multiple locations including the residence of the then chairman Haseeb Drabu. Eight locations were searched including the then Executive Director AK Mehta, and the then directors Muhammed Ibrahim Shahdad and Vikrant Kuthiala. They were members of the bank’s Estates Committee.

After the Jammu and Kashmir government referred the case to the federal investigator, the CBI had registered a case on November 11, 2021, on the allegations of irregularities in the purchase of the Akruti Gold building for Rs 180 crore by the bank.

Last month, former Chief Minister Omar Abdullah was also questioned by the Enforcement Directorate in connection with the same purchase. Already one former director is in custody.

“Incriminating documents, articles and electronic evidence, several bank account details and bank locker keys have been recovered during searches,” CBI officials were quoted buy India Today as saying. “According to sources, Mumbai-based director of the bank, Nihal Chandrakant Garware, played a crucial role in the deal and alleged siphoning off crores of rupees from the bank through this property deal. Garware was recently arrested. Omar Abdullah is allegedly close to Nihal Garware and ED wants to know if he was involved in the deal.”

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