Shares of state-run Bank of Maharashtra (BoM) plunged over 7 per cent on Thursday to hit a lower circuit of Rs 12.50 after the PSU bank’s MD and CEO Ravindra P Marathe was remanded to policy custody in connection with the DSK Group’s Rs 3,000 crore fraud. Shares of the PSU bank came tumbling down after the Pune district court on Wednesday remanded police custody to BoM’s MD and CEO Ravindra P Marathe and executive director Rajendra Gupta for seven days till June 27. Bank of Maharashtra stocks slipped to a fresh 52-week low of Rs 12.50 per share. Around 11 a.m., BoM stocks traded lower by 3.79 per cent at Rs 12.96 on the BSE.
The Bank of Maharashtra officials were arrested by the Economic Offences Wing (EOW) of the Pune police early on Wednesday in a case of fraudulent loans worth Rs 3,000 crore extended to the DSK Group in Pune. The bank’s Ahmedabad zonal manager Nityanand Deshpande and former CMD Sushil Muhnot were also arrested in connection with the case. Alongwith BoM’s officials arrested were DSK’s chartered accountant Sunil Ghatpande and vice-president of engineering Rajiv Newaskar. Four of the six officials were remanded to seven-day police custody till June 27, while the other two — Jaipur-based Muhnot and Ahmedabad based Deshpande — are yet to be produced before the court.
“The outstanding exposure of Bank of Maharashtra to D. S. Kulkarni Developers Limited is Rs 94.52 crore,” the state-run bank said in a BSE regulatory filing on June 20. According to the charges filed by Pune police, the BoM officials colluded and caused losses to the bank by illegally approving a loan of Rs 50 crore for DSK’s Dreamcity project in Pune. The Pune-headquartered Bank of Maharashtra is slated to have its AGM on Thursday in which it has to seek shareholders’ approval for capital-raising plans to the tune of Rs 3,000 crore by way of FPO/ rights issue/ QIP/ preferential issue and to set off accumulated losses of Rs 2,543.65 crore from the share premium account.