The Lakshmi Vilas Bank directors have been accused of fraud after a customer filed a complaint against them. The bank spokesman confirmed during the press conference e on late Thursday. The customer who filed a complaint against the directors of Laksmi Vilas Bank is the Indian financial service a subsidiary of Religare Finvest (RFL) .The Company has accused the management of the bank to misappropriating a massive amount of Rs 790 crore or a $111.4 million dollars that the company had kept as fixed deposit with the bank. The figures and the news were reported by the Economic Offences Wing of the New Delhi police.
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It appeared that there was a wider conspiracy to illegally misappropriate RFL’s funds and LVB was at the center of it,” said the complaint, which was filed against the directors of Lakshmi Vilas. The directors face charges of cheating, breach of trust, misappropriation and conspiracy, Chennai-based Lakshmi Vilas said in a statement filed to the Bombay Stock Exchange and the National Stock Exchange of India on Thursday, adding it was considering taking appropriate legal measures. The bank’s shares fell nearly 5% on Friday. Reuters was not immediately able to contact the directors of Lakshmi Vilas Bank or RFL for comment. It was unclear how many directors were under investigation.
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The police investigation is occurring as the domestic banking sector has been roiled by defaults from housing finance companies and the central bank has taken charge of a leading co-operative lender this week. India’s banks are also grappling with roughly $150 billion in stressed assets and the country’s non-banking finance companies are struggling with liquidity pressures. Lakshmi Vilas said earlier this year it would merge operations with housing finance firm Indiabulls Housing Finance Ltd (IBHF) in a share-swap deal. Indiabulls did not immediately respond to a request for comment on potential implications for the merger.
Source: Economic Times
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