After, PNB and BoB, Oriental Bank hit by Rs390-cr loan fraud

  • After, PNB and BoB, Oriental Bank hit by Rs390-cr loan fraud

After, PNB and BoB, Oriental Bank hit by Rs390-cr loan fraud

The Central Bureau of Investigation (CBI) on Thursday filed a case against jeweller Dwarka Das Seth International for alleged fraud of Rs 390 crore. The investigating agency was conducting searches at multiple locations across Delhi and Uttar Pradesh in connection with the case.

The Oriental Bank of Commerce has alleged that it was defrauded by Delhi jeweller Dwarka Das Seth International and its owner Sabhya Seth. The Bank stated in its complaint that Dwarka Das Seth International enjoyed various credit facilities including foreign bill discounting under letters of credit (LCs).

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.

The CBI charged the company and other directors of two firms with cheating OBC in connivance with bank officials and dubious financial instruments.

Besides Gurpal Singh, the CBI has booked 12 others, including Simbhaoli Sugars' Chairman Gurmit Singh Mann, CEO G S C Rao, CFO Sanjay Tapriya, Executive Director Gursimran Kaur Mann and other company officials as well as unknown bank officials. Of this, Rs 97.85 crore was declared non-performing asset (NPA). 13 (2) r/w 13 (1)(d) of the Prevention of Corruption Act, 1988 for causing a loss of Rs.109.08 crore (approximately) to the bank. They adjusted the total liability of about ₹ 112.95 crore on June 30, 2016, by way of the deposit of the new corporate loan. A lot of them relate to conspiracy and cheating, and some involve employees of the bank.

"The corporate loan, too, turned NPA on November 29, 2016, thus resulting in its first outstanding loan of Rs 97.85 crore (as alleged fraud) and the fresh corporate loan of Rs 109.08 crore (as fresh outstanding)", said Dayal.

As per the CVC guidelines, the probe agency is supposed to register an FIR immediately in cases of frauds on public sector banks involving Rs one crore and above.

The FIR also alleged that Singla had submitted inflated stock audit reports and balance sheets, apart from diverting the loans to sister concerns. "The company has committed breach of terms of MoU and diverted funds for purposes other than that agreed upon between the company and our bank", the OBC said.