The Central Bureau of Investigation (CBI) has registered two separate cases against Mumbai-based Varun Industries Ltd (VIL) for allegedly defrauding two public sector banks for an amount collectively to the tune of Rs 388.17 crore.
The agency has registered a case against Kiran Mehta and Kailash Agarwal, promoters and directors of Varun Industries Ltd (VIL).
According to the CBI, in the first case, a written complaint dated 08-12-2021 was received from Sridhar Sahoo, Deputy General Manager, Central Bank of India, against MS VIL, its directors Kiran Mehta, Kailash Agarwal and others for allegedly defrauding the bank to the tune of Rs 269.29 crores as on date of NPA i.e. 17.04.2012.
"The allegations in the complaint revealed that the accused company had availed various credit facilities from Central Bank of India in a consortium led by Indian Bank, with a total sanctioned working capital - term loan limit of Rs 292.15 crore on September 16, 2011. Out of the said limits a term loan of Rs 19.45 crores was sanctioned outside consortium on September 16, 2011 for a Wind Mill Power Project at Jaisalmer.
The complaint further revealed that the company did not remit Export Payment received from sale of Goods received under LC to meet the Import Leg of Merchant Transaction. The Merchant Trade LC was issued by the bank on the request of the company. It is further alleged that the transactions under this head was dishonestly intended to siphon out the funds from the banking channel. It was also revealed from the complaint that the company had discounted export bills/obtained advance against export bills sent for collection to its associate companies and did not honour the bills and later on wrote-off the same in its books," the CBI stated in its FIR.
"In domestic trade transactions, there were accommodative transactions and actual movements of goods had not happened between the company and its local traders, as proof of supply of goods by way of lorry receipts were not submitted. That the inland LC opened by the company were discounted through a financial intermediary and credited to various small companies whose capability of meeting such large transactions is doubtful. Criminal misconduct of public servants is suspected in sanction, disbursement, monitoring or follow-up of the credit facilities to the company," the FIR stated.
In the second case, a written complaint dated 20-12-2021 was received from P. Santosh, Chief General Manager, Canara Bank (e-Syndicate Bank) against M/s VIL and its directors and others for allegedly defrauding the bank to the tune of Rs.118.88 crores as on date of NPA i.e. 24.05.2012.
"The allegations in the complaint revealed that the accused company had availed various credit facilities from e-Syndicate Bank in a consortium led by Indian Bank, with a total sanctioned limit of Rs124.90 crore on 22.03.2011. The complaint further revealed that the accused company had availed Packing Credit Limits (PCL) facilities for export of steel and kitchenware items but it was revealed that at least on three occasions the beneficiaries of PCL were not dealing with the steel and kitchenware items. The total amount involved in the three PCL dated 12.01.2012, 25.01.2012 and 31.01.2012 was Rs116.70 crore. It is suspected that the proceeds in the said PCL facilities were diverted to other activities. It is also pointed out in the complaint that the accused company was mainly dealing with two companies in Dubai and most of the sale turnover was with them only. It is further alleged that the accused company and its group companies were the only suppliers of these two Dubai based companies. Criminal misconduct of public servants are suspected since PCL beneficiaries were not dealing with the steel and kitchenware items, though the PCL was opened for the same," the FIR stated.
