The Central Bureau of Investigation (CBI) has launched a comprehensive investigation into a Mumbai-based metal-trading firm following allegations of cheating the public-sector Union Bank of India out of approximately ₹21 crore. Free Press Journal reported that the firm is now under scrutiny after a forensic audit of its loan account revealed suspicious transactions, including payments made to suppliers without receiving the corresponding goods.
CBI's Action and FIR Registration
The CBI has taken swift action by registering a First Information Report (FIR) against the firm and unidentified public servants under various sections of the Indian Penal Code and Prevention of Corruption Act. These sections pertain to offenses such as cheating, inducing dishonest delivery of property, misappropriation of property, criminal conspiracy, and misconduct by public servants. The agency is determined to uncover the truth behind the alleged irregularities that occurred between 2008 and 2018.
Bank's Complaint and Investigation Details
The Union Bank of India, acting as the complainant, submitted a written complaint to the CBI on June 12, outlining the firm's fraudulent activities during the years 2008 to 2018. The bank has accused the firm of defrauding them to the tune of ₹21 crore, with this amount determined after deducting ₹18.12 crore received through a one-time settlement with the borrower. The CBI has taken this complaint seriously and is committed to thoroughly investigating the matter.
Background of the Metal-Trading Firm
Established in 2001, the Mumbai-based metal-trading firm engaged in the trading of steel scrap and finished steel products through another company where the firm's proprietor served as a director. However, due to a series of irregularities, the firm's loan account was classified as a Non-Performing Asset (NPA) in October 2018. Subsequently, the bank sent a recall notice, followed by a notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in an attempt to resolve the matter.
Red Flags and Forensic Audit Unveil Irregularities
In February 2019, the Union Bank of India designated the firm's loan account as a Red Flag Account (RPA), signifying significant concerns and requiring a thorough investigation. As part of this scrutiny, a forensic audit was conducted by the bank, which uncovered several irregularities and suspicious transactions. Specifically, the audit revealed that around ₹4.58 crore was advanced to various suppliers in October 2018. However, neither the goods were received nor the amount was recovered. Furthermore, there were instances of sales where invoices lacked the necessary receipts, further raising suspicions. Most of these transactions involved related parties, heightening concerns regarding possible fraudulent activities.
Share
Tweet
