CBI files case against Assam-based firm in loan fraud of Rs 65.73 crore

The Central Bureau of Investigation (CBI) has lodged an FIR against an Assam-based private firm and its two directors for allegedly committing a loan fraud of Rs 65.73 crore.

According to the FIR, in March 2006, Santosh Jaiswal and Padma Nath Deka, the directors of Brahmaputra TMT Bars Pvt.Ltd, obtained a Term Loan facility of Rs 9 crore and Fund-Based Working Capital of Rs 6 crore from SBI for the establishment of a Billets Plant.

The FIR also states that another Fresh Term Loan of Rs 9.71 Crore was sanctioned in favour of the firm in March 2009, coupled with an increase in the Cash Credit Limit from Rs 6.00 Crore to 11.65 Crore and a Non-Fund-Based Limit of Letter of Credit from 3.50 Crore to 6.50 Crore.

“Again in November 2009, the CC Limit was enhanced from 11.65 Crores to Rs 24 Crores, and the LC Limit from 6.50 Crore to Rs 12.50 Crore. In April 2010, a Term Loan of Rs.was sanctioned while the CC Limit was renewed at the then-existing level of Rs.24 Crore, and the Non-Fund-Based Limit was enhanced from 12.50 Crore to 18 Crore.

“In November 2010, the Borrower Company had gone for a 10 MW Captive Power Project (CPP) for which a Term Loan Limit of Rs 20 Crore was sanctioned under a Multi-Banking Arrangement (MBA), wherein Allahabad Bank and North Eastern Development Finance Corporation (NEDFI) were the other lenders,” the FIR read.

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According to the CBI FIR, the borrower firm and its directors produced phoney financial statements with bogus transactions so that the bank could increase the working capital, drawing power, and term loan from time to time.

Allahabad Bank then opted out of the MBA, and Assam Gramin Vikas Bank came into the picture. 

The credit restrictions were ultimately revised in July 2013, with a new working Capital Term Loan of Rs 10 Crore. The Fund-Based Working Capital Limit was decreased from 24 to 14 crores.

After obtaining the aforementioned Credit Facilities, the borrower Company stopped servicing the interest as well as repaying the principal, in violation of the loan facilities' sanctioned Terms and Conditions, causing the loan account to lapse.

“The accused directors of the company colluded among themselves in committing criminal activities like violating sanctioned terms and conditions, illegally diverting the borrowed fund, and committing illegal activities, including submission of fake financial statements, fabrication of fictitious transactions, diversion of funds, and misappropriation of funds for purposes other than for which the funds were sanctioned by the bank, with an intention to defraud the bank and to gain unlawfully at the cost of the bank’s funds. The aforesaid complaint was verified, and verification revealed the commission of cognizable offences, so this case is being registered,” the FIR reads.

CBI said that further investigation into the case is underway.