Oriental Bank Of Commerce fraud: Sugar company chief, directors booked by CBI

Oriental Bank Of Commerce fraud: Sugar company chief, directors booked by CBI”

The CBI has registered a case against Simbhaoli Sugars Limited, its Chairman Gurmit Singh Mann, Deputy Managing Director Gurpal Singh and others in connection with an alleged bank loan fraud of Rs 97.85 crore.

Finance Minister Arun Jaitley who raised concern over increasing number of wilful defaulters and non-performing assets in the banking system, termed these defaults as "a scar on economy".

The case is registered against the chief managing director (CMD) of the company and others including directors, chief executive Officer (CEO), chief financial Officer (CFO) and unknown bank officials and other private persons, u/s 120-B r/w sec.

The probe focuses on two loans - Rs 97.85 crore which was declared fraud in 2015 and another corporate loan of Rs 110 crore which was used to repay the previous loan. The loans were paid out through private loan accounts opened for farmers and combined quantity of each dispensation was credited in the Escrow (present) account of Simbhaoli Sugars on the basis of carrying out provided by the business that inputs like seed, fertilizers and other essential devices etc have actually been provided by it to all the specific farmers.

The OBC was hit by the disclosure of Rs 390-crore scam on Saturday involving a Delhi-based diamond jewellery exporter in bank loan fraud.

Following the complaint, the CBI carried out searches at multiple locations in Delhi, Hapur and Noida in UP. This new case adds up more pressure on the banks and raises some serious questions on the lending procedures. The case was registered almost six months after the bank filed a complaint with the central agency. 60 crore loan for the goal of financing around 5,762 sugarcane farmers.

Officials said that the Bank sanctioned a loan amounting to Rs 148.60 crore in 2011 to the private company for financing individual, Joint Liability Groups, Self-Help Groups under the tie-up arrangement under the RBI Scheme to 5,762 sugarcane farmers supplying sugar produce to said private company during the period from January 25 to March 13, 2012. The corporate loan, too, turned NPA on 29.11.2016, thus resulting in its first outstanding loan of Rs. 97.85 crore (as alleged fraud) and the fresh Corporate Loan of Rs. 109.08 crore (as fresh outstanding).

According to the CBI, when OBC approached Debt Recovery Tribunal (DRT), Simbhaoli Sugars took another loan in 2015 of Rs 112.94 crore to pay its liability in one go.

The bank in its investigation found that the accounts of the farmers were also declared as NPA on March 31, 2015 in accordance with the prudential norms.

The loan money was "dishonestly and fraudulently diverted by the company for its own needs", Dayal said.

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