Bank loan

CBI hands over two companies for alleged bank loan fraud

The CBI has registered separate bank fraud cases against two private companies involving loans of over ₹900 crore.

In the first instance, the agency hired LEEL Electricals Limited and its directors for allegedly causing a loss of ₹307.10 crore to the SBI. The loan account was declared NPA in March 2019 and reported as fraud in October 2021.

According to the FIR, while the company sold its durable consumer goods business to another company in May 2017, substantial investment was seen in plant and machinery after the sale. The bank alleged that there is a possibility of embezzlement by booking false purchases of factories, machinery and purchases from related parties.

“A dividend in the amount of ₹97.08 crore was distributed to shareholders for 2016-17. The promoter and group of promoters owned 56.19% of the shares of the company and as a result, ₹45.33 crore was pocketed as non-taxable income by the promoters,” the FIR alleged. Credit facilities under the consortium agreement involving nine lenders amounted to ₹1,075 crore, of which ₹684.91 crore was due, it said. In the case of SBI, the amount was ₹307.10 crore.

In the second case, the CBI named Ahmedabad-based Electrotherm (India) Limited and others for allegedly causing a loss of ₹631.97 crore to the Bank of India. The bank had however later recovered ₹550 crore, effectively resulting in a loss of ₹81.97 crore.

“The company was availed of fund-based and non-fund-based credit facilities totaling ₹703.89 crore, exclusive from Bank of India, as per the latest sanction dated October 19, 2011, by the Management Committee.. .the company began to face liquidity problem since April 2011 and has not paid its dues despite the restructuring of the account,” the agency said.

The account was classified as NPA in December 2012. A forensic analysis of the transactions revealed several irregularities, including embezzlement and diversion of funds through subsidiaries and associated companies with common administrators. The company also engaged in transactions with suspicious dealers who were involved in issuing false invoices without delivering goods, as alleged.