CBI books Vadodara firm for Rs. 2,654cr fraud; raids premises
What's the story
The CBI on Thursday said it had registered a criminal case against a Vadodara-based company dealing in electric cable and equipment, and its directors for allegedly cheating various banks to the tune of Rs. 2,654cr.
It also launched searches at the official and residential premises of the company, Diamond Power Infrastructure Ltd (DPIL), and its directors in Vadodara in Gujarat, a CBI spokesperson said.
Fraud
DPIL fraudulently availed credits from 11 banks
The CBI alleged that DPIL, which manufactures electric cables and equipment, is promoted by SN Bhatnagar and his sons Amit Bhatnagar and Sumit Bhatnagar, who are also the executives of the firm.
It is alleged that DPIL (had) fraudulently availed credit facilities from a consortium of 11 banks since 2008, leaving behind an outstanding debt of Rs. 2,654.40cr as on June 29, 2016.
Loans
Company got loans despite being on RBI's defaulter list
The company and its directors managed to get the term loans and credit facilities, in spite of the fact that they were named in the RBI's defaulters list and Export Credit Guarantee Corporation caution list.
At the time of formation of consortium in 2008, Axis Bank was the lead bank for the term loan and BOI was the lead bank for cash credit limits.
Wrongdoing
Company was submitting false stock statements
It is alleged that the firm, with the active connivance of officials from various banks, managed to get enhanced credit facilities.
According to the CBI, the company had been allegedly submitting false stock statements to the lead bank by treating receivables more than 180 days (non-current asset) as less than 180 days (current asset) to get more drawing power in their cash credit accounts.