Simbhaoli Sugars: CBI registers Rs 200 crore loan default case against CMD of Simbhaoli Sugars
NEW DELHI: The CBI has filed a case towards Simbhaoli Sugars Ltd and its CMD and administrators for dishonest Oriental Financial institution of Commerce (OBC) of Rs 200 crore.
OBC has claimed fraud price over Rs 200 crore has been dedicated by Simbhaoli Sugars Ltd, Hapur with the financial institution’s Meerut department in 2011, and once more in 2015.
The CBI has named CMD Gurmit Singh Mann, deputy MD Gurpal Singh and eight others together with the CFO, government and non-executive administrators of Simbhaoli Sugars Ltd, aside from unknown financial institution officers, in its FIR.
One of many board administrators in Simbhaoli Sugars booked for financial institution fraud is the son-in-law of a prime Congress chief in Punjab.
The CBI is finishing up searches at a number of areas in Delhi and Uttar Pradesh in reference to its case towards Simbhaoli Sugars Ltd.
The corporate had approached OBC in 2011 in search of round Rs 150 crore in mortgage for the aim of financing round 5,200 sugarcane farmers for which it supplied KYC paperwork for opening particular person accounts of farmers. Nevertheless, when the cash was transferred in farmers’ accounts, it was diverted for different functions.
When OBC approached Debt Restoration Tribunal (DRT), Simbhaoli Sugars took one other mortgage in 2015 of Rs 110 crore to pay its legal responsibility in a single go.
Simbhaoli Sugars Ltd is one in every of India’s largest sugar refinery firms and is listed on the Bombay Inventory Change.
How the fraud occurred
In its criticism to the CBI, OBC claimed that Simbhaoli had approached it in November 2011 with a proposal for financing sugarcane farmers (representing 5,762 farmers) below the tie-up association with the corporate (most restrict of Rs three lakh per farmer) throughout the general publicity cap of Rs 150 crore, which was authorized by OBC in December 2011.
The corporate equipped to the financial institution the names of particular person farmers, in addition to particulars of land holding and cane equipped by them within the earlier season. It was additionally imagined to submit the KYC and different requisite paperwork together with the mortgage utility of particular person farmers.
The financial institution disbursed loans to five,762 farmers between January and March 2012 totalling Rs 148.59 crore.
The loans had been disbursed by means of particular person mortgage accounts opened for farmers and consolidated quantity of every disbursement was credited within the escrow account of Simbhaoli Sugars, on the idea of endeavor given by the corporate that inputs like seed, fertilizers and different mandatory equipments had been equipped by it to all the person farmers.
It turned out that Simbhaoli had issued improper KYC certificates within the names of the farmers. The corporate transferred the funds from the escrow account to different accounts maintained by it with SBI, Punjab Nationwide Financial institution and UCO Financial institution by means of RTGS. This fashion, OBC claimed, Simbhaoli Sugars has misappropriated the cash lent by it and there’s clear reduce division of funds.
CBI says that Simbhaoli brought on a lack of Rs 109 crore to OBC. The mortgage account of Rs 148.59 crore was declared a non performing asset (NPA) in March 2015 and a fraud in Might 2015.