Its director SN Bhatnagar and his two sons have allegedly defrauded 11 banks to the tune of Rs 2654 crore
As reports of banks flouting guidelines to aid interests of promoters and commercial entities continue to pour in, another case emerged on Thursday as CBI registered a case against Vadodara-based M/s Diamond Power Infrastructure Ltd (DPIL).
Its director SN Bhatnagar and his two sons have allegedly defrauded 11 banks to the tune of Rs 2654 crore.
According to latest reports, CBI has started conducting searches at its corporate office, two factory premises and at three residences of its founder, Managing Director and Joint Managing Director.
DPIL is engaged in the production of cables and other electrical equipment.
Notably, loans were given despite this entity being blacklisted by RBI.
It is alleged that MIs DPIL, through its management, has fraudulently availed credit facilities from a consortium of 11 banks since 2008. The company and its Directors managed to get the term loans and Credit facilities, in spite of the fact that they were already appearing in the RBI's defaulters list and ECGC Caution List at the time of initial sanction of credit limits by the consortium.
At the time of formation of Consortium in 2008, Axis Bank was the lead bank for the Term Loan and Bank of India was the Lead bank for CC Limits.
Here’s the present exposure of credit facilities from various member banks:
The company, allegedly with support of officials from various banks, managed to obtain enhancement in credit facilities. During the year 2011, DPIL had projected turnover of Rs. 2197.60 crore for the year 2012 whereas the actual turnover was Rs. 1267.60 crore only for the year 2011.
DPIL got credit facilities enhanced from Rs. 285 crore to Rs. 480 crore. In the next year, against the estimates of Rs.2197.60 crore, DPIL actually achieved a turnover of Rs. 1740.38 crore as on 31.03.2012, which was less by Rs. 457.22 crore from the projected turnover figure, despite the fact that the CC limit was fully availed by the company.
Bank of India officials, while conducting the credit review, did not decrease the cash credit limit, and kept it unchanged at Rs.480 crore even though such figures were based on grossly exaggerated sales figures.