Chargesheet against Paramount Airways

Paramount Airways

The credit insurance policies were used in securing multiple bank guarantees from SBI, BoI, Indian Bank, Andhra Bank and IDBI to cover its transactions with PSU oil firms and to meet expenses relating to fuel, aircraft, lease, rent airport charges and others, it said.

"On default of Paramount Airways, the oil companies invoked bank guarantees and in turn, the five banks raised claims to the extent of Rs 442 cr on OICL," the agency said.

Even when some officials were reluctant to issue credit policies to Paramount Airways for want of requisite documents, Ramadoss convinced Thiagrajan to give exclusive mandate on aviation insurance to OICL, it said.

It said the credit policies were issued to Paramount in absence of proposal form and without seeing the financials and credit requirement of the Airline, without understanding the risks and without it having any re-insurance support and the banks were never roped in while accepting the risk.

"The entire sum insured was in the net of the company's account. Claims were lodged by the banks for Rs 441 cr which was to be absorbed by OICL as no recovery of this amount was possible in absence of re-insurance support (with Paramount)," the charge sheet said.

The agency also said that Paramount was "reluctant in disclosing its financials during 2007-09 with OICL due to its poor financial health and negative credit worthiness".

All the accused have been booked for criminal conspiracy, cheating under the IPC and also under the Prevention of Corruption Act.

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