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CBI steps up vigil against bank fraud

by April 12, 2017 General

The CBI has registered nine cases of bank frauds worth over Rs 5,100 crore in the past week, stepping up its crackdown on wilful defaulters.

On Wednesday, the agency arrested four directors of a Delhi-based perfume manufacturer, Surya Vinayak Industries Ltd., that allegedly defaulted on loans worth Rs 2,240 crore.

Last week, it registered six cases against Winsome Diamonds group promoter Jatin Mehta. The cases were registered based on complaints lodged by three banks — Central Bank of India, IDBI Bank Ltd. and Vijaya Bank — which accused Mehta and two Mumbai-based jewellery private firms of wilfully defaulting on loans totaling Rs 1,530 crore.

Officials said that the alleged crime started with opening of standby letters of credit by the Indian banks for the import of gold by these firms from UAE based distributors. “A standby letter of credit is a guarantee given by a bank on behalf of the client that it will fulfil a contractual commitment with a third party in case payment default happens,” said CBI spokesperson RK Gaur. The third party in this case were UAE-based buyers and the buying companies were Mehta’s Winsome Diamonds and Jewellery Limited and Forever Precious Jewellery and Diamonds Limited.

“It is alleged that the promoter director (Mehta) of the company in criminal conspiracy with one Hathyam Salman Ali Obaidah, who was controlling all the thirteen foreign buyer firms of UAE through power of attorney, cheated the bank by diverting bank funds, “ reads probe documents related to one of the cases against Mehta accessed by HT.

Winsome and its subsidiaries owe about Rs 7,000 crore to a consortium of 15 public and private banks, officials added.

“It was alleged during investigation that the accused fraudulently used more than 100 shell companies for round tripping and diversion of bank funds. There was no genuine business transaction between the said firm and shell companies. The said firm also allegedly diverted Rs 376 crore (approx) out of the Working Capital Limit obtained from consortium of banks to six wholly-owned foreign subsidiaries based in Singapore, Hong Kong, Dubai, Indonesia, Ghasa and China. Further investigation is continuing,” said CBI in a statement.