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CBI registers case against Kolkata steel mill for defrauding 8 banks

LiveMint logoLiveMint 06-07-2017 PTI

New Delhi: The Central Bureau of Investigation (CBI) has registered an FIR against the Kolkata-based SPS Steels Rolling Mills Ltd for allegedly defrauding a consortium of eight banks of over Rs551 crore.

According to the CBI FIR, the company availed cash credit limit, term loan and line of credit limit amounting to Rs512 crore from the consortium of banks led by Allahabad Bank, but subsequently revised its audited accounts for financial year 2011-13 “fraudulently and dishonestly”.

The subsequent revision of the audited accounts “adversely affected the financial of the company” and the loans became non-performing assets (NPA), it said. The outstanding debts went up to over Rs551 crore, it said.

The other members of the consortium are Indian Overseas Bank, UCO Bank, State Bank of Hyderabad, Central Bank of India, UBI, Oriental Bank of Commerce and Corporation Bank, CBI spokesperson R.K. Gaur said in New Delhi on Thursday.

“The pre-revised audited balance sheets were allegedly submitted by the borrower to induce the banks to sanction enhanced credit limits from existing banks and fresh sanction of loan from newly-inducted banks in the consortium,” he said.

He said it was further alleged that the company directors fraudulently diverted the funds for repayment of term loan availed from Yes Bank, which was outside the consortium, without any underlying business.

“Some of the letters of credit issued by the member banks of the consortium on behalf of the borrower also devolved. It was also alleged that the directors did not repay the loan and the loan account with Allahabad Bank, leader of the consortium, became NPA on 31 May 2013. The loan accounts with other member banks became NPA on subsequent dates,” he said.

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