CBI books two companies for alleged bank loan fraud

Cases involve loans of more than ₹900 crore

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

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

According to the FIR, while the company sold its consumer durable business to another company in May 2017, substantial investment was observed in the plant and machinery subsequent to the sale. The bank alleged that there is a possibility of diversion of funds by booking of fake procurement of plant, machinery and purchases from related parties.

“Dividend amounting to ₹97.08 crore was distributed among shareholders for 2016-17. The promoter and promoter group were holding 56.19% shares of the company and as a result, ₹45.33 crore was pocketed as tax-free income by the promoters,” alleged the FIR. The credit facilities under the consortium arrangement involving nine lenders stood at ₹1,075 crore, of which there were dues to the tune of ₹684.91 crore, it said. In the SBI’s case, the amount was ₹307.10 crore.

In the second case, the CBI has 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 leading to a loss of ₹81.97 crore.

“The company was enjoying fund and non-fund based credit facilities aggregating to ₹703.89 crore, exclusive from the Bank of India, as per the last sanction dated October 19, 2011, by the managing committee…the company started facing liquidity problem since April 2011 and failed to pay its dues despite restructuring of account,” said the agency.

The account was classified as NPA in December 2012. A forensic analysis of the transactions revealed several irregularities, including diversion and siphoning off funds through subsidiary and associate companies having common directors. The company also indulged in transactions with suspicious dealers who were involved in issuing false bills without delivery of any goods, as alleged.

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