The Central Bureau of Investigation (CBI) has registered a case of cheating, criminal conspiracy and criminal misconduct against a real estate company, its directors and former directors and others for allegedly causing a wrongful loss of ₹39.16 crore to the Canara Bank. The bank in its complaint has alleged that the accused have cheated and defrauded the bank by diversion of funds, bogus transactions, mis-utilization and siphoning of funds.
According to the CBI, a written complaint was received from Subodh Kumar, General Manager of Canara Bank, Pune Circle on March 12, 2022, alleging that during 2013-16, the Pune based company availed credit facilities of ₹55 crore from the bank for setting up a four-star hotel at Ahmednagar.
CBI started investigations
“However, the borrower company could not start its commercial operations from April 2016 and their loan account slipped into NPA on March 31, 2016 and subsequently it was declared as fraud on March 2, 2020. A forensic audit was conducted by Canara Bank which revealed that the company and its directors have cheated and defrauded the bank and caused a wrongful loss of ₹39.16 crore (as on March 31, 2016) to the bank," said a CBI official. As per the bank's complaint, there were deficiencies in vehicle details and invoices therein, which indicates bogus entries without actual movement of material on site.
What caught the CBI's eye
“No investment made towards furniture and fixtures and plant and machinery at the hotel site. It was also observed that expenses incurred towards furniture and fixture and plant and machinery were highly suspicious as the same were required to be incurred subsequent to completion of civil work. Advance drawn by the borrower towards the construction cost is not reflected in the development of the project on site," the complaint further alleged.
There was complete non co-operation from the borrower to the Forensic Auditor even after providing reasonable opportunities. The borrower did not allow reviewing of its books of accounts nor did it send its account software backup for the purpose of audit. Further, no meaningful documents or working papers were provided for review purposes. Hence, such non co-operation from the promoter, borrower is in contravention of general terms and conditions of sanction. Based on the observations in the main report, the Auditor has stated that the account should be classified as fraud," the CBI stated in its FIR.
