LOAN DEFAULT CASE REGISTERED AGAINST SIMBHAOLI SUGARS
The Central Bureau of Investigation has registered a case against Simbhaoli Sugars, its Chairman Gurmit Singh Mann and others in connection with an alleged bank loan fraud of ~970 million. Simbhaoli Sugars is one of the largest sugar mills in the country.
The Central Bureau of Investigation (CBI) has registered a case against Simbhaoli Sugars, its Chairman Gurmit Singh Mann, Deputy Managing Director Gurpal Singh and others in connection with an alleged bank loan fraud of ~978.5 million.
Simbhaoli Sugars is one of the largest sugar mills in the country.
The company’s Chief Executive Officer G S C Rao, Chief Financial Officer Sanjay Tapriya, Executive Director Gursimran Kaur Mann, and five non-executive directors have also been booked by the agency. Gurpal Singh is the son-in-law of Punjab Chief Minister Amarinder Singh.
The CBI on Sunday carried out searches at eight premises, including residences of the directors, factory, corporate office and registered office of the company in Delhi, Hapur and Noida, CBI spokesperson Abhishek Dayal said.
The probe focuses on two loans — ~978.5 million that was declared fraud in 2015 and another corporate loan of ~1.1 billion that was used to repay the previous loan.
The second loan was declared non-performing asset ( NPA) on November 29, 2016, nearly 20 days after the scrapping of ~1,000 and old ~500 notes was announced, according to a CBI FIR.
The bank was allegedly cheated of ~978.5 million, but the loss incurred is ~1.09 billion, the FIR read. The lender, Oriental Bank of Commerce (OBC), complained to the CBI on November 17, 2017, but the agency registered a case of criminal conspiracy and cheating under the Prevention of Corruption Act on February 22.
According to the FIR, OBC sanctioned a loan of ~1.49 billion to the company in 2011.
The loan was sanctioned for financing 5,762 sugarcane farmers based on a tie-up agreement under an RBI scheme for supplying sugar produce to the company from January 25, 2012 to March 13, 2012.
The loan money was “dishonestly and fraudulently diverted by the company for its own needs”, Dayal said.
According to an MoU, of the price to be paid by Simbhaoli Sugars to the farmers, loan liabilities were to be adjusted and the remaining amount was to be paid by the company to the growers, according to the FIR.
The account turned NPA on March 31, 2015, and was declared alleged fraud by the bank to the RBI on May 13, 2015 for an amount of ~978.5 million.
OBC alleged that in addition to the existing NPA, the bank, under multiple banking arrangements, sanctioned another corporate loan of ~1.1 billion to the company on January 28, 2015, to pay its outstanding loan of ~978.5 million. The bank adjusted the total liability of ~1.13 billion towards the company by way of deposit of the new corporate loan. “The corporate loan, too, turned NPA on November 29, 2016,” Dayal said.