CBI Registers Case Against Mumbai-Based Company for Bank Fraud

On Monday, April 11, 2023, report published in the media revealed that the Central Bureau of Investigation (CBI) had registered a case against a Mumbai-based private company and its two directors for criminal conspiracy, cheating, and criminal misconduct. The case is related to the alleged wrongful loss of Rs 324.64 crore to Bank of Baroda (e-Dena Bank) and four consortium banks. A detailed report was published in the Free Press Journal.

Complaint Filed by Bank of Baroda Official

According to the CBI, Rajesh Bairagi, assistant general manager at Bank of Baroda, filed a complaint against the company on March 23, 2023. The complaint alleges that the company, which is in the steel business, committed a fraud of Rs 324.64 crore between 2015 and 2016. It is alleged that the fraud was perpetrated in conspiracy with unknown public servants and persons with an intention to defraud and cheat the banks.

Details of the Fraudulent Transactions

As per the complaint, the fraud was committed through inflating the figures of sales and purchase through transactions that were not genuine. The transactions with related parties, non-routing of sale proceeds in consortium bank accounts, and siphoning of funds were also involved in the fraud. The bank conducted an investigative audit of the company's account, which revealed that the company had misled and cheated the bank.

Wrongful Loss to Lending Banks

The CBI stated in its FIR that the borrowing company and its directors had caused wrongful loss of Rs 324.64 crore to the lending banks, including Bank of Baroda, State Bank of India, Indian Bank (e-Allahabad Bank), Punjab National Bank (e-United Bank), and J&K Bank. The company and its directors allegedly gained from the fraud at the banks' expense.

Further Course of Action

Sources said that the CBI would contact the banks to seek documents related to the case and decide on the further course of action. The registration of the case by the CBI is a significant development in the ongoing efforts to combat financial crimes and fraudulent activities in the country. It is expected that the CBI will conduct a thorough investigation into the matter to bring the culprits to justice.