The Central Bureau of Investigation (CBI) has taken action against Loha Ispaat Limited, its Chairman-cum-Managing Director Rajesh Gaurishankar Poddar, and others for allegedly defrauding a consortium of five banks for Rs. 1,017.93 crore. The FIR filed by the CBI names directors Rajesh Mohanlal Agarwal, Sanjay Bansal, Anju Poddar, Manish Omprakash Garg, and Loha Investments Pvt. Limited as the accused.
The company had taken credit facilities worth Rs. 812.07 crore from the consortium comprising the Bank of India, Canara Bank, Indian Overseas Bank, Punjab National Bank, and the Bank of Maharashtra. However, the accused individuals allegedly falsified sales and purchase transactions, manipulated accounts, and embezzled funds, leading to non-payment of outstanding loans worth Rs. 1,017.93 crore.
The fraud took place between April 1, 2012, and March 31, 2017. The FIR claimed that the company stopped clearing its letter credit bills and other financial obligations to its lenders in 2014-15, citing various reasons.
In 2014, the consortium explored the possibility of restructuring the corporate debt, and a special investigative audit was assigned. The forensic audit reports allegedly uncovered large-scale irregularities. The FIR revealed that sales were concentrated in a few entities, such as Aum Impex, Star Offshores, Pioneer Exim, and Steel Link Impex, which constituted a significant proportion of the total sales.
In 2012-13, sales were concentrated in just three entities, which amounted to 74.80per cent (Rs. 2,408.72 crore) of the total. The following year, sales for these entities comprised 67.33per cent (Rs. 2,370.65 crore), while in 2014-15, the three entities along with Steel Link Impex constituted 91.30per cent of the sales (Rs. 839.88 crore). The FIR also claimed that the top 10 third parties covered 86.71per cent (Rs. 3,238.76 crore) of the total net receipts.
The audit allegedly discovered improper adjustment entries to accommodate fictitious accounting entries. The purchases in 2012-13 were primarily made from three entities, Marque Global, Greenfield Overseas, and Arihant International, which constituted 70.90per cent of the total purchases amounting to Rs. 2,202.47 crore. No purchases were made from these entities in the next fiscal year.
Background checks indicated that the offices of the suspect entities were locked, and no substantive business activities were being performed from the addresses on record. The account was declared a non-performing asset with effect from August 28, 2014, by one of the lenders, which classified it as a fraud in February 2019.
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