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CBI probes alleged Rs 22-cr bank fraud by two Himachal manufacturing firms

The firms -- Brilliant Electro Air and Bright Plastics -- incorporated in 2010 and 2017 respectively, have the same registered address at Manjhotu in Barotiwala.

Shimla | October 19, 2020 10:06:56 pm
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(Written by Gagan)

The Central Bureau of Investigation (CBI) is probing an alleged bank fraud by two Baddi-based manufacturing firms which availed loans worth more than Rs 22 crore based on “highly overvalued” collateral securities from an Andhra Bank branch in Shimla back in 2017. Both the manufacturing units were later found to be non-functional, while the loan amount was allegedly diverted into other accounts.

The firms — Brilliant Electro Air and Bright Plastics — incorporated in 2010 and 2017 respectively, have the same registered address at Manjhotu in Barotiwala.

Proprietors of the firms applied for two separate loans at the bank’s branch in New Shimla seeking working capital for their units, which they claimed were engaged in making plastic and fan parts, according to letters to the CBI written earlier this year by Nishith Nayak, the bank’s zonal manager in Chandigarh.

The bank sanctioned an open cash credit (OCC) limit of Rs 10 crore to Brilliant Electro Air in January 2017 and Rs 12 crore to Bright Plastics in May that year, wrote Nayak.

For collateral security, the firms offered land at a village in Punjab’s Fatehgarh Sahib, which was later found to be highly overvalued – its value falling from Rs 2,500 crore to around one-fifth of the amount during revaluation by the bank. The bank said that the initial valuation of the land by the empanelled valuer was found to be “inflated”.

The zonal manager said in his complaint that the borrowers allegedly cheated the bank by diverting funds to accounts of their relatives maintained with other banks. In 2018, both accounts were declared as non-performing assets (NPA) and last year, they were declared as fraud by the bank.

Against an outstanding amount of over Rs 28 crore (including interest), a mere Rs 1,854 was recovered from the two accounts after they became NPA, the bank said.

In July this year, the CBI’s anti-corruption bureau unit in Shimla registered two FIRs against the proprietors of the firms for cheating, criminal conspiracy and other suspected offences under sections 120B and 420 of the IPC and relevant sections of the Prevention of Corruption Act.

‘Unknown public servants’ booked

The agency also booked “unknown public servants” and told a local court that it is trying to ascertain if an insider in the bank helped the accused in raising the loans. The bank too told the CBI that it is initiating regular departmental action (RDA) against its officials found accountable during the examination of the alleged irregularities.

Last month, a court rejected the anticipatory bail application of one of the accused, a permanent resident of Canada, observing that the alleged loss of public money has ultimately affected “the poor members of the society”.

R K Gaur, a spokesperson of the CBI, said that further investigation of the case is underway but did not say if any of the accused have joined the investigation or if the connivance of any bank official in the alleged fraud has been ascertained so far.

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