CBI files case against pvt company, its directors in an alleged bank fraud

New Delhi, July 15 (Bureau) The Central Bureau of Investigation (CBI) registered a case against a private company based at Mumbai and its four directors in an alleged bank fraud of Rs 55.27 crore.Searches were conducted at three premises of accused in Mumbai which led to recovery of incriminating documents / articles, CBI statement stated. The CBI received a complaint from Canara Bank against a private company based in Mumbai and its four directors in which it was alleged that the private company was sanctioned Working Capital Facility of Rs 30 crore and Rs 25 crore respectively, by Canara Bank and Bank of Maharashtra under consortium arrangement.

The loan was sanctioned for the manufacturing and sales of gold and diamond studded jewellery, it stated. It was further alleged that the funds of the bank were used by the company to repay its long term borrowings. In the initial year, the company repaid its long term borrowing of Rs 18 crore to its parent company and thereby diverted the entire limit of Rs 10 crore of Canara Bank to said parent company on the date of availment of loan itself. Further, the company did not route any of the business transactions through the account and the transactions which do appear in the account were with their group concerns only, indicating diversion of funds.

Further a BG of Rs 20 crore which was being availed from HDFC Bank was also invoked and the same was paid by Canara Bank by converting the Non-Fund Based limit to Fund Based limit, CBI statement stated.It was also alleged that the borrower company entered into fraudulent transactions and defaulted in payment obligations towards the banks by diverting and siphoning off the banks’ funds in conspiracy with others causing a loss of Rs 55.27 crore to the banks, it stated.