The Central Bureau of Investigation has filed a case against Bombay Stock Exchange listed–Simbhaoli Sugars Limited, one of the largest sugar refining companies–for allegedly cheating Oriental Bank of Commerce (OBC) of Rs 109 crore in 2011 on the pretext of financing sugarcane farmers.

Among those named by CBI in its FIR include Simbhaoli Sugar’s Chairman and Managing Director Gurmit Singh Mann, Deputy Managing Director Gurpal Singh and eight others including CFO, executive and non-executive directors of the company apart from unknown officials of the public sector bank. The bank and CBI have claimed that Gurpal Singh is Deputy MD of the company while Simbhaoli’s website claims he is a Director.

One of the senior management executives of the company is said to be related to a top political leader in Punjab.

This is the second FIR in three days registered by CBI+ on the complaint of OBC pertaining to bank fraud. Earlier, as first reported by TOI, CBI filed a case to probe Rs 390 crore fraud committed with OBC by Karol Bagh based Dwarka Das Seth International diamond trader Sabhya Seth and associates.

Once again, like Dwarka Das fraud, CBI did not act on OBC’s complaint for three months in Simbhaoli’s fraud even though the bank approached the central agency asking to register a case on November 17, 2017. Earlier, CBI sat on OBC’s complaint in Dwarka Das case for six months.

In the latest FIR, CBI has alleged that Oriental Bank of Commerce sanctioned a loan amounting to Rs 148.59 crore to Simbhaoli Sugars in December 2011 after the company approached it with a proposal for financing sugarcane farmers under the tie-up arrangement with the company (with a maximum limit of Rs 3 lakh per farmer).

The company supplied to the bank the names of individual farmers’ along with their details of land holding and cane supplied by them in the previous season. It was also supposed to submit the KYC and other requisite documents along with the loan application of individual farmers.

The bank’s Hapur branch disbursed loans to 5,762 farmers between January and March 2012 totalling Rs 148.59 crore. The loans were disbursed through individual loan accounts opened for farmers and consolidated amount of each disbursement was credited in the Escrow (current) account of Simbhaoli Sugars on the basis of undertaking given by the company that inputs like seed, fertilizers and other necessary equipments etc have been supplied by it to all the individual farmers.

It turned out that Simbhaoli issued improper KYC certificates in the names of farmers. The company transferred diverted the funds from the Escrow account to other accounts maintained by it with SBI, Punjab National Bank and UCO Bank through RTGS. This way, OBC claimed, Simbhaoli Sugars has misappropriated the money lent by it and “there is clear cut division of funds”.

The loan account of Rs 148.59 crore was declared non-performing asset (NPA) in March 2015 and a fraud in May 2015 for an outstanding amount of Rs 97.85 crore.

Interestingly, in addition to existing NPA, OBC, under multiple banking arrangements sanctioned another corporate loan of Rs 110 crore to Simbhaoli In January 2015 to pay its outstanding loan of Rs 97.85 crore. “They (bank) adjusted the total liability of Rs 112.94 crore of company in June 2016 by sanctioning this new corporate loan,” says CBI.

The corporate loan, too, turned NPA on November 29, 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), said CBI Spokesperson Abhishek Dayal.

After filing the case, CBI searched eightpremises including residences of Directors of Simbhaoli, its factory, corporate office and registered office in Delhi, Hapur and Noida. #casansaar (Source - TOI)