PSL fraud: CBI conducts raids in Mumbai, recovers Rs 1.99 cr

The Central Bureau of Investigation (CBI) on Thursday conducted raids in Mumbai in connection with four separate cases lodged against Devki Nandan Sehgal, Whole Time Director of a private firm PSL Ltd, and others on allegations of committing bank frauds to the tune of Rs 217.37 crore.

Following the raids, the CBI has recovered around Rs 1.99 crore. The first case was registered on the allegations of defrauding Syndicate Bank (now Canara Bank) to the tune of Rs 30.49 crore (approx).

PSL Ltd which was in the business of pipe manufacturing and pipe coating, availed credit facilities from Syndicate Bank and thereafter, diverted the funds into its subsidiary companies.

The second case was registered on the allegations of defrauding Oriental Bank of Commerce (now merged with Punjab National Bank) to the tune of Rs 51.90 crore. PSL Ltd had availed credit facilities in order to execute work orders received from GAIL and NTPC.

The accused deliberately siphoned off the money received from the projects of GAIL and NTPC without informing the Oriental Bank of Commerce. The third case was registered on the allegations of defrauding IDBI Bank Ltd. to the tune of Rs 29.06 crore.

The loan received from the bank for various projects of the company were utilised for purposes other than for which it was sanctioned, like repayment of dues of other banks etc.

The fourth was registered on the allegations of defrauding Export Import Bank of India (EXIM Bank) to the tune of Rs 105.92 crore. The accused availed credit facilities in order to execute work orders but deliberately diverted the money received for other purposes.

"Today, we conducted raids in Mumbai at eight locations in Daman, Kutch, Noida and Delhi at the premises of the accused which led to recovery of incriminating documents and articles. During searches at the premises of the Whole Time Director of the private company at Mumbai, foreign currency $90,413, and cash of Rs 1.99 crore (approx) were recovered," the official said.