CBI REGISTERS A CASE AGAINST CMD & OTHERS INCLUDING DIRECTORS OF A PRIVATE FIRM ON THE ALLEGATIONS OF CHEATING A CONSORTIUM OF EIGHT BANKS TO THE TUNE OF RS. 551.13 CRORE (APPROX) AND CONDUCTS SEARCHES

Press Release
New Delhi, 06.07.2017

The Central Bureau of Investigation has registered a case against CMD; four Directors, all of Kolkata based private Steel Rolling Company & said private company based at Kolkata; CA and unknown others U/s 120-B, r/w 420 & 420 of IPC. It was alleged that the said accused of Kolkata based private company in collusion with CA and unknown others cheated a consortium of 8 Banks comprising Allahabad Bank (Lead Bank), Indian Overseas Bank, UCO Bank, State Bank of Hyderabad, Central Bank of India, UBI, Oriental Bank of Commerce and Corporation Bank to the tune of Rs. 551.13 crore (approx) during the period 2010-13 through the borrower account of said Private Steel Rolling Company.

 It was further alleged that the borrower company availed Cash Credit Limit, Term Loan and LC limit amounting to Rs. 512 crore (approx) from the said consortium of Banks and fraudulently & dishonestly revised their audited accounts for the FY 2011-13 after sanction of loan. The subsequent revision of the audited accounts adversely affected the financials of the company. The pre-revised audited balance sheets were allegedly submitted by the accused borrower to induce the Banks to sanction enhanced credit limits from existing Banks and fresh sanction of loan from newly inducted Banks of the consortium. It was further alleged that the Directors of the said borrower company fraudulently & dishonestly diverted the Bank funds released through the credit facilities so availed for repayment of Term Loan availed from YES Bank, outside the consortium, without any underlying business. Some of the Letters of Credit issued by the member Banks of the consortium on behalf of the accused borrower also devolved. It was also alleged that the said Directors did not repay the loan and the loan account with Allahabad Bank, leader of the consortium, became NPA on 31.05.13. The loan accounts with other member Banks became NPA on subsequent dates.

Searches are being conducted today at the premises of accused in Kolkata which led to recovery of some incriminating documents.

Further investigation is continuing.

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