Banks get tough, 3 fraud cases registered with CBI in a week

In the aftermath of the Punjab National Bank scam, banks have now become more pro-active in sending complaints to the CBI. Acting on complaints by three different banks, the investigative agency has registered three cases of financial fraud within a week against a jeweller, a businessman, and a public servant.

Sources say that CBI director Alok Kumar Verma has asked his officers not to sit on complaints on bank frauds and immediately register an FIR. Verma issued this direction after the Home and Finance ministries asked to revamp the banking fraud unit and start expediting complaints. The Prime Minister Office (PMO) has also expressed that these cases should dealt with in all seriousness.

The agency registered a case against diamond jewellery exporter Dwarka Das Seth International on Thursday for an alleged bank loan fraud to the tune of Rs 389.85 crore on complaint of Oriental Bank of Commerce (OBC).

The complaint was filed before the CBI six months ago and it was only when bank officials asked them to look into the matter, the agency booked the company and the directors of the firm — Sabhya Seth, Reeta Seth, Krishna Kumar Singh and Ravi Singh — and another company named Dwarka Das Seth SEZ Incorporation.

The agency stated that the company has availed various credit facilities from OBC between 2007 and 2012 and it was found that the company was using Letters of Credit (LoC) to pay off other creditors against the purchase of gold and other precious stones and transfer gold and funds outside the country using fictitious transactions.

“The borrowers were utilising this facility for discounting of bills, under letters of credit established by Dubai Bank Kenya, Soleil Chartered Bank, Trade Chartered Bank, TF Bank Kontrakt Inc, Century Bank Corp LCC, etc,” OBC said in its complaint.

The practice of raising loans through LoCs continued until OBC noticed that the other banks had poorly rated the firms.  and then stopped the credit facility. The complaint also said that the firm did not repay loans on time and demanded extension of the repayment window due to poor business conditions.

“Now, for the last 10 months, the customer is not responding and he and his family is not available at the address in the bank records,”the bank had told the CBI. 

Similarly on Wednesday, the CBI filed a case against businessman Amit Singla and others on a complaint of Bank of Maharashtra for securing a loan on false representation by forging documents and its criminal misappropriation and use. The bank alleged that Ashirwad Chain Co-Proprietor Amit Singla took a loan of Rs 9.5 crore and, in connivance with valuers, showed inflated prices of the collateral deposited against the loan.

Singla had put three properties as collateral which were valued at over Rs. 18 crore by Tech Mach International at the time of taking the loan, but the actual market value of the properties were found to be only Rs 2.5 crore after the loan turned into an non performing asset.

On the same day, CBI filed a case against Inder Chand Chundawat, then senior branch manager in Punjab National Bank's at Barmer office in Rajasthan for abuse of official position. Chundawat allegedly siphoned off money from government schemes and put it in the accounts of fictitious persons causing a loss of over Rs 2 crore.

The CBI has filed two FIRs against Chundawat.The first case states that Chundawat, between August 2011 and June 2012, deposited huge amounts of money related to government schemes into an account opened
by him under a fictitious name - Sugna Devi. In the second case, Chundawat sanctioned and disbursed 26 Mudra loans - between September 2016 and March 2017 - in violation of rules and regulations, causing a loss of over Rs 62 lakh to the bank.

Earlier, cases of major financial frauds worth Rs 11,300 crore by diamantaire Nirav Modi and by Rotomac owner Vikram Kothari have surfaced, in which the CBI has filed cases and and arrested several people.

CBI directive

CBI Director Alok Kumar Verma has asked his officers not to sit on bank fraud complaints and immediately register an FIR and start investigation.