Mumbai: CBI books firm, directors for cheating UCO bank to the tune of ₹23 crore

Mumbai: The CBI has filed a case against a private company and its directors for allegedly cheating UCO Bank to the tune of ₹23.18 crore. It is alleged that the accused persons defrauded the bank by obtaining credit facilities for the development, expansion of the business and willfully diverted the funds to various sister or related concerns, officials said.

CBI received written complain by UCO bank official

According to the CBI, a written complaint was received in June 2021 from Rajesh Nagar, Deputy General Manager, UCO Bank Zonal Office, Mumbai, stating that the company, having its office at Shivaji Park, had approached Dadar branch of the bank and represented that it was engaged in promoting floriculture business. On the basis of the application, the bank sanctioned various credit facilities from Dadar branch in 2012 initially for ₹21 crore.

Misrepresentation, falsification of records: CBI

“The company could not service the accounts and there being no transactions, the account was declared as NPA on September 30, 2014. On becoming NPA, the account was transferred to the bank’s Asset Management Branch, Mumbai on January 22 2018. The present outstanding balance as on December 31, 2020, is ₹23.18 crore. It has been observed that there has been misrepresentation, falsification of records by inflating inventory and understanding the loss. Diversion and siphoning of funds by investment in subsidiary companies and subsequent diminution in value. Malafide intention of hiding information and non-providing of data by the management,” the agency claimed in its FIR.

Company, directors diverted funds

As per the complaint, the company and its directors and promoters, with malafide intention deliberately diverted the funds out of the term loan of ₹21 crore and defrauded the bank. The directors and promoters misutilised the various credit facilities provided by the bank, the agency’s FIR stated, adding that all the relevant documents are in the custody of the bank and will be handed over to the CBI during the course of the investigation.