Published: Mon, February 26, 2018
Medicine | By Rogelio Lindsey

CBI books Simbhaoli Sugars for Rs 109 crore loan default case

CBI books Simbhaoli Sugars for Rs 109 crore loan default case

The lender, Oriental Bank of Commerce, complained to the CBI on November 17, 2017, but the agency registered a case of criminal conspiracy and cheating under the Prevention of Corruption Act on February 22.

Congress President Rahul Gandhi hit out at the PM, alleging that jeweller Dwarka Das Seth "disappeared" like Nirav Modi and Vijay Mallya, while the government loo-ked the other way.

This new bank fraud has surfaced after over Rs 10000 crore scam was unearthed at the Punjab National Bank (PNB), which involves celebrity jewller Nirav Modi, his family members and Mehul Choksi, owner of Gitanjali Gems. The police has registered a case against several top officials of Simbhaoli Sugar, including its chairman and managing director, chief executive and chief financial officer, some unknown bank officials, and other private persons.

It was further alleged that in addition to the existing NPA (March 31, 2015), the bank, under multiple banking arrangements sanctioned another corporate loan of Rs 110.00 crore to the sugar company on January 28, 2015, to pay its outstanding loan of Rs 97.85 crore.

According to the CBI, Simbhaoli Sugars had approached the Oriental Bank of Commerce in 2011 seeking around Rs 148 crore in loan to finance almost 5,200 sugarcane farmers. "He had approached me for consultancy on taking loan". The corporate loan, too, turned NPA on November 29, .2016. The bank, which had the last contact with Sabhya Seth in March 2014, has claimed that he availed credit facilities between 2007 and 2012 in the form of Letters of Credit (LC) for making payments to other trade creditors against the purchase of gold and other precious stones.

While the bank declared a fraud of Rs 97.85 crore, the actual loss incurred was Rs 109.08 crore, according to the FIR.

Breaking his silence over the Rs 11,400-crore fraud in India's second-biggest PSU bank, Prime Minister Modi yesterday warned of stringent action against those involved in financial irregularities and said loot of public money will not be tolerated. Of this, Rs 97.85 crore was declared non-performing asset (NPA).

According to the FIR, OBC sanctioned a loan of Rs 148.60 crore to the company in 2011.

In a bid to recover the dues, the bank had also approached the buyers, including Devi Jewells, Mannat FZE and PlatDiam International, but without any success.

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