CBI Registers FIR Over Rs 63 Crore Loan Fraud in India Exim Bank Involving UK-Based Company

The Central Bureau of Investigation (CBI) has registered an FIR regarding an alleged USD 10 million (approx. Rs 63 crore) loan fraud against India Exim Bank.

The case involves allegations of loan diversion, non-supply of machinery and misuse of bank funds by the company, its former directors and other associated entities, officials said on Wednesday.

The CBI registered the FIR based on a complaint filed by G Selva Kumar, Assistant General Manager at India Exim Bank. The bank alleged that it had suffered a wrongful loss of USD 10 million, which was approximately Rs 63 crore. This was the outstanding loan amount as of September 29, 2014, when the loan account was classified as a Non-Performing Asset (NPA).

A USD 10 million loan approved in 2012 for a UK recycling project was siphoned off when machinery was never supplied by NIEPL, and funds were illicitly diverted to entities like Hume Synthesis. The account became an NPA on September 29, 2014, and was later labeled as fraud.

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The FIR names Hanjer Biotech (Erith) Ltd, a UK-based company that has since been dissolved, its former directors and guarantors, Navi Infrastructure Engineering Pvt Ltd (NIEPL), Hume Synthesis Pvt Ltd and unknown public servants as accused.

According to the complaint, Hanjer Biotech had entered into an agreement with Navi Infrastructure Engineering for the supply of machinery for a recycling project in the United Kingdom. The company approached India Exim Bank for financial assistance to complete the project.

The total project cost was estimated at USD 15.90 million. The company proposed to arrange USD 5.90 million through contributions from its promoters, while the remaining USD 10 million was to be raised through a loan from India Exim Bank.

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In 2012, the bank’s Executive Committee in Mumbai approved a term loan of USD 10 million for the project, according to the FIR.

However, the complaint alleged that the machinery for the recycling project was never supplied. It further alleged that the advances received for purchasing the machinery were diverted to other purposes by extending loans to related parties, including Hume Synthesis Pvt Ltd.

The CBI FIR alleges that the entire loan amount of USD 10 million was siphoned off instead of being used for the purpose for which it was sanctioned.

The loan account was classified as a Non-Performing Asset (NPA) on September 29, 2014. It was subsequently declared fraudulent in accordance with the Reserve Bank of India’s (RBI) guidelines.

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The CBI has registered the case to investigate the alleged fraud and the role of the company, its former directors, guarantors and other entities involved in the transaction. The allegations will be examined as part of the investigation.

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