PROBING A complaint by the Axis Bank, the Economic Offences Wing (EOW) of Mumbai police has arrested three directors of two private firms who were alleged beneficiaries of loans availed by Parekh Aluminex Ltd (PAL) from the bank, which it “wilfully defaulted”, the police said. According to the complaint, between 2011 and 2013, PAL took three short-term loans totalling Rs 195 crore and Rs 45 crore towards purchase of its non-convertible debentures. Of the Rs 195 crore, Rs 75 crore was availed through cash credit in May 2011, Rs 50 crore was availed through Letter of Credit (LoC) in May 2011 and Rs 70 crore was raised through a one-time LC in January 2013. However, the said loans turned non-performing assets, says the remand copy of the EOW filed before the Esplanade Court.
According to the EOW, in a similar fashion, PAL allegedly duped the Federal Bank of Rs 50 crore of which Rs 25 crore was invested by it in non-convertible debentures. The agency has been probing the firm, its directors (late Amitabh Parekh, Rajendra Gothi, Devanshu Desai and Kiran Parekh) and its beneficiaries for allegedly defrauding the two banks of Rs 290 crore since November last year. The arrest in the case were made last week.
The probe revealed that while Rs 70 crore was allegedly diverted towards PAL’s loan accounts maintained with other banks, Rs 50 crore was transferred to Suryakiran Ferro Alloys Pvt Ltd (SFAPL) and Rs 70 crore was transferred to Trison Metalex Pvt Ltd (TMPL). The directors of these two firms — Bhawarlal Bhandari and Kamlesh Kanungo of TMPL and Premlal Goragandhi of SFAPL — were arrested by the EOW and remanded in custody until March 23. “The money transferred to SFAPL and TMPL purportedly towards purchase of goods was merely a paper transaction,” the remand copy says.
“The role of the bank officials in this crime has to be ascertained. The possibility of illegal gratification, in any, paid to bank officials also needs to be ascertained. Investigation in respect to utilisation and end beneficiary of the remaining Rs 25 crore is in progress,” the remand further said. For encashing the LC, SFAPL and TMPL submitted documents including tax invoices and corresponding delivery challans and goods consignment notes to its negotiating banks to show that it had supplied the said goods to PAL but they were fake.
Also, the truck numbers used to ferry goods revealed that 30 per cent of the quoted truck numbers were that
of two wheelers, the EOW said.
“However investigations revealed that the address to which the goods were delivered by SFAPL were owned by Premier Industrial Corporation Ltd and Korindo Plywoods Pvt Ltd and they were unaware of any company named SFAPL. The goods consignment notes purportedly issued to Vivek Transport Corporation, Gujarat, did not have any business relation with SFAPL,” the EOW said.
“In the case of TMPL, the delivery address to which the goods were delivered belonged to Heavy Industrial Tube but the said company is unaware of TMPL. Consignment notes were issued by three transporters of which two said they were unaware of the said company, while the third transporter returned it unserved,” the official added.
“Goragandhi used to be present in the office and has also signed on documents like bill of exchange, and correspondence with UCO bank. Kanungo, who holds 95 per cent shares in TMPL — which availed Rs 70 crore in the form of 2 LoCs — participated in preparing forged documents to encash the LCs with Axis Bank,” added the remand note.
“Bhandari acted on instructions of Kanungo. He used to submit fake documents with and follow up with the officers of Axis Bank during the processing of the LCs,” the remand application said. “The trio helped in layering and diverting the defrauded amount through shell companies. The amount was then diverted for repayment of previous dues of PAL, which was not related to its scope of business,” the remand note stated.
Replying to a query by The Indian Express, an Axis Bank spokesperson said on email, “Our exposure is part of a lending arrangement involving around 22 banks and the bank had filed an FIR with the EOW, post declaring
the concerned exposure as fraud. We are fully cooperating with the investigating authorities.”