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Three Fresh Cases Of Banking Fraud Reported

Three fresh incidences of financial fraud have come to light as the CBI filed cases against a jeweler, a businessman and a public servant on complaints by three different banks earlier this week

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Political Climate Accused Of Encouraging The Promotion Of Black Money. Pixabay

Three fresh incidences of financial fraud have come to light as the CBI filed cases against a jeweler, a businessman and a public servant on complaints by three different banks earlier this week, an official said on Saturday.

On Thursday, the Central Bureau of Investigation (CBI) registered a case against Delhi’s Karol Bagh-based diamond jewelry exporting firm Dwarka Das Seth International for an alleged bank loan fraud of Rs 389.85 crore involving the Oriental Bank of Commerce.

The CBI on Wednesday filed a case against businessman Amit Singla and others on a complaint of the Bank of Maharashtra for a loan through forged documents and its criminal misappropriation and use.

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The same day, the agency also filed a case against Inder Chand Chundawat, then Senior Branch Manager in the Punjab National Bank (PNB)’s Barmer office in Rajasthan, for abuse of his official position.

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Earlier, cases of major financial frauds involving Rs 11,300 crore by diamantaire Nirav Modi and Rs 3,695 crore by Rotomac owner Vikram Kothari surfaced, in which the CBI has filed cases and made several arrests. Pixabay

 

After the PNB and the Bank of Baroda filed cases against Nirav Modi and Rotomac Global, the Oriental Bank of Commerce, the Bank of Maharashtra and Barmer office of the PNB rushed to the CBI as well with their complaints of fraud, leading to the agency filing three separate cases.

The Oriental Bank of Commerce has alleged that it was defrauded by Delhi jeweler Dwarka Das Seth International and its owner Sabhya Seth. The loans turned into non-performing assets (NPAs) way back in 2014, but the bank approached the agency on August 16 last year, after the company had folded up and Seth fled the country.

The CBI has started tracing India-based directors and partners of the company.

The Oriental Bank of Commerce complaint has alleged that the Dwarka Das Seth International took loans by way of letters of credit and other such credit facilities for gold jewelry export/import between 2007 and 2012 but failed to pay back.

A probe by the bank found that the company had indulged in round-tripping of funds through fictitious companies abroad and had utilized funds by discounting bills based on the letters of credit of foreign banks, which were either non-existent or had negative ratings.

ALSO READ: Punjab National Bank detects $1.8 bn fraud at a Mumbai branch, Links to Nirav Modi

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“We feel that Sabhya Seth of Dwarka Das Seth International Pvt Ltd had orchestrated an elaborate plan to dupe the bank,” the bank said in its complaint. Pixabay

Similarly, the Bank of Maharashtra has approached the CBI to lodge a loan default complaint against a Delhi businessman Amit Singla. The loan had turned into an NPA in 2013 and the bank has even sold a property kept as collateral to recover its dues, sources said.

The Bank of Maharashtra’s FIR names Singla, the proprietor of Delhi-based Ashirwad Chain Co, loan guarantor Roshan Lal Bhalotia, property valuation firm Tech Mach International and unknown officials of the bank.

It is alleged that Singla and his company took loans of Rs 9.5 crore through cash credit facility from the bank between 2010 and 2012. The accused allegedly submitted three properties in Delhi and Haryana as collaterals. The properties, at the time of taking the loan, were valued at over Rs 18 crore by Tech Mach International.

But, after the loans turned into NPAs, the actual market value of the properties was found to be only Rs 2.5 crore. One of the properties, a double-storied house owned by Roshan Lal in Rohtak, Haryana, was valued at Rs 4.85 crore while sanctioning the loan. When the bank sold it off to recover its dues, it fetched only Rs 73 lakh.

ALSO READ: PNB Fraud Fully Exposes the Malicious Intent Of Nirav Modi

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Similarly, a commercial property owned by the accused at Chandni Chowk in Delhi was valued by Tech Mach at the time of disbursal of the loans at Rs 4.95 crore, but it was actually worth Rs 31 lakh only.

Tech Mach was later removed from the panel of values by the bank.

In the complaint, the Bank of Maharashtra said: “The overvalued valuations were deliberately given in connivance with the borrowers and the guarantors … to fraudulently induce the bank to finance the borrower.”

The FIR also alleged that Singla had submitted inflated stock audit reports and balance sheets, apart from diverting the loans to sister concerns.

According to the complaint, the branch manager had defrauded the bank of over Rs 2 crore in 2011 and the bank had even suspended the official following an internal inquiry. (IANS)

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CBI Unravels Wrongdoing in Atomic Minerals Mining Licensing

The Delhi High Court that it had taken a policy decision not to auction or re-grant the offshore blocks

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Coal, Mining, China, 5G
5G-powered tramcars went into service in a coal mine in north China's Inner Mongolia Autonomous Region. Pixabay

The Central Bureau of Investigation (CBI) has uncovered large-scale irregularities in the ownership pattern, financial resources and technical ability of five companies granted mining licences for offshore blocks bearing rare and atomic minerals.

The companies, while applying for mining licence in June 2010, had a common director, the Central government has told the Supreme Court.

The Centre has argued that the five companies were registered after the government called private parties for mining licences in June 2010, says a CBI document.

At that time, the government was unaware that these minerals had strategic and defence value.

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The companies, while applying for mining licence in June 2010, had a common director. Pixabay

The administering authority of these licences did not obtain mandatory clearances from various ministries, especially the Home Ministry, according to the CBI.

The Delhi High Court, in an order dated April 25, directed the Centre to execute the exploration licence of the companies as per the procedure within four weeks from the date of receipt of the order.

The verdict came even after the Centre, in an affidavit dated April 16, told the Delhi High Court that it had taken a policy decision not to auction or re-grant the offshore blocks, bearing atomic minerals, to private parties.

Moving the Supreme Court against the High Court ruling, the Centre accused the companies of not submitting the proper supporting documents on the basis of which the marking was done in the evaluation sheet.

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The companies were charged with not providing any document indicating the sanctioned line of credit from any financial institution or bank.

One of the companies approached a leading financial services company seeking finance to carry out mining.

“This document was accepted as a document in support of the financial capability of the applicant company. Accordingly, a MoU was signed on September 23, 2010, which was received by Indian Bureau of Mines (IBM) in October 2010, after the date of submission of application for grant of licences on September 14, 2010,” said an internal CBI document.

Therefore, the Centre believed that the company had not confirmed the sanctioned credit limit as per the revised guidelines.

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The Centre has argued that the five companies were registered after the government called private parties for mining licences in June 2010. Pixabay

“The above MoU was valid only till March 31, 2011. Thus, on the date of issue of grant order by IBM on April 5, 2011, the MoU was null and void,” said the document.

According to information from the Ministry of Corporate Affairs (MCA), the authorised share capital of this company and its sister concerns was Rs 25 lakh each whereas the paid up share capital of each of the companies was Rs 1 lakh.

The net worth was negative for each company during fiscal 2016-17. The companies, even as of now, are not financially capable of undertaking any activities or business operations, said the document.

The companies stated that they were sister companies of 12 other companies engaged in different business sectors.

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“The worth of the companies and their directors are more than Rs 300 crore. If the exploration licence is granted to the applicant companies, expenses up to Rs 50 crore can be spent easily and can be further increased up to Rs 100 crore, if required,” says a petition in the Supreme Court.

“However, this is not acceptable since the company has been incorporated as Limited Liability Company and therefore the financial commitments by the sister companies had no relevance in the absence of resolution passed by the Board of Directors of the sister companies,” it added.

Despite the inadequate documents in support of their financial strength, the companies got 25 marks by the screening committee which shortlisted applications for mining licence.

“These private companies failed to produce satisfactory documentation for the requisite technical ability and financial resources to undertake exploration operation”, said an officer familiar with the investigation.

The CBI has charge-sheeted the government officials who in November 2017 signed in haste two licence deeds with one of the companies without following the due process.

The CBI, which has started preliminary enquiry after a gap of six years following a go-ahead from the apex court, favours a full-fledged investigation against everyone linked to the grant of licences. (IANS)