NEW DELHI, July 13: Former Cabinet Secretary, Zafar Saifullah had ignored the objections by the Central Bureau of Investigation and Central Vigilance Commission in granting extensions to M Gopalakrishnan, former Indian Bank chairman and the prime accused in the Rs 1,300 crore Indian Bank scam.

This has been reported, it is reliably learnt, by the high-level Committee of Secretaries appointed by the Supreme Court to look into the subject of how a record number of extensions eight had been granted to Gopalakrishnan. The confidential report has been submitted to the apex court last month.

While giving the details of extensions as well as objections of the CBI and the CVC, the Committee of Secretaries have hinted in their report that the action of the former Cabinet Secretary was indicative of ``malafide'' on his part. ``We have not stated this as a conclusion in the report but the facts and the chronology of events speak for themselves,'' said a member of the committee.

The report reveals that the former CMD, who is at the centre of the Indian Bank scam had been granted the extensions between 1993-95 despite the CBI and the CVC pointing out that he had been embroiled in a spate of vigilance cases and corruption charges.

When contacted, the former Cabinet Secretary under whom the first two extensions are alleged to have been given to Gopalakrishnan said, ``The proposal for granting an extension had emanated from the Ministry of Finance.

It was known that there were certain investigations against Gopalakrishnan but the stage of investigations was so preliminary that a prima-facie view about the culpability of the officer could not have been taken.''

Saifullah informed that the subject had been taken up at a meeting of top-level officials held when the first proposal for extension was initiated. At least two Secretary-level officials were present at the meeting.

During the discussions it was felt that top bank officers were in a ``vulnerable'' position and could be transfered by allegations made by any disgruntled client and that taking cognisance of such allegations even before a good prima facie case appeared to be available would ``demoralise the banking system.''

``The consensus that emerged at that meeting,'' Saifullah revealed, ``was that the Government must appoint a sufficiently high level committee with both substantial exposure and professional responsibility for the banking industry to evaluate such allegations and advise the government.''

Zafar Saifullah indictedÎHe added that since a decision was pending on the formation of the committee, Gopalakrishnan was given a ``truncated'' extension of three months after which time the committee was expected to take over and give a policy decision in the matter.

However, sources said, even after two extensions the committee had not come into existence. And instead of terminating his tenure, the government went ahead and granted Gopalakrishnan six more extensions.

Meanwhile, the CBI which is investigating the bank scam has sent a letter to the Ministry of External Affairs for overseas investigation about the alleged diversion of funds to the LTTE.

``The Ministry has written to the embassies and a reply is awaited. There are three companies in Germany and Rotterdeim which we want to investigate and for which we have approached the Ministry,'' said an official. The CBI has also registered eight new criminal cases, most of them against the MVR group, which had managed to secure the maximum loans from Gopalakrishnan.

``Three more are in the pipeline and three cases involving Powermex steel company of Orissa are in the final stages of investigation,'' the official said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.