Bank Fraud

Rs.25 crore Fraud in SBI: CBI Books Private Firm and Directors for Cheating SBI of Rs 25.62 Crore


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The anti-corruption wing of the Central Bureau of Investigation (CBI) in Chennai has taken legal action against Everon Castings Pvt Ltd and its seven directors for allegedly defrauding the State Bank of India (SBI) of Rs 25.62 crore.

Accused and Charges

Firm and Directors Involved

Everon Castings Pvt Ltd, based in Coimbatore, and its directors—Rajesh, R Andal, B Balasubramanian, T Prabhakar, MV Srinivasan, S Balaji, and S Dhanalakshmi—have been charged under various sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act.

Details of the Case

Loan Suppression and Misrepresentation

According to the FIR, the directors of Everon Castings Pvt Ltd suppressed crucial information when they approached the SBI, Coimbatore city branch, in 2017 to take over a loan of Rs 18 crore from Karur Vysya Bank. During the takeover process, the loan amount increased to Rs 21 crore.

Forensic Audit Findings

A subsequent forensic audit revealed that the additional loan was used to settle letters of credit to avoid issues in the loan takeover. The audit also uncovered that the proceeds from discounting were not routed through SBI, and the company concealed its association with another firm. Additionally, it was found that the company had business dealings with four other banks without SBI’s knowledge.

Loan Default and Fraud Declaration

Non-Performing Asset and Liquidation

The loan was declared a non-performing asset (NPA) in 2018 due to non-payment, and in 2023, the company was declared fraudulent. The firm’s liquidation process is currently underway.

Legal Actions and Preventive Measures

To prevent the accused from fleeing jurisdiction, SBI approached the Madras High Court, requesting the CBI to register an FIR, issue lookout notices (LOC), and impound the passports of the accused. The bank also initiated disciplinary proceedings against its employees K Kandapan, Ram Anad, PA Sani, P Rajendran, K Elango, and Rajini Ashok Kumar, who handled the accounts in question.

Conclusion

The CBI’s action against Everon Castings Pvt Ltd and its directors underscores the ongoing efforts to combat corporate fraud and protect the integrity of the banking system. The case highlights the importance of transparency and accountability in financial dealings.

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