The Central Bureau of Investigation (CBI) has filed a chargesheet against A.C. Muthaiah, the then chairman of First Leasing Company of India Ltd., Chennai, Farouk M. Irani, then managing director, and 23 others for causing a loss of ₹102.87 crore to the Syndicate Bank.
The CBI registered a case on June 8, 2016 against the then chairman of a private company based in Chennai and others on a complaint from the bank.
The company had been allegedly banking with Syndicate Bank since 2004.
The accounting data base maintained was in ‘Oracle’, which allowed the said company to manipulate it through the back end process. The CBI alleged that the company had been showing inflated income and assets over the years (since 1998)by showing fictitious income and non-existing assets.
Most of the loans shown as non-performing assets granted by the company to its clients were fictitious. Loans availed from the banks were allegedly diverted to shell companies controlled by the then managing director. It was also alleged that non-performing assets were shown to be taken over by these shell companies through bogus agreements to avoid NPA provisions resulting in inflated profits thereby causing loss of ₹102.87 crore to Syndicate Bank.
Investigation revealed that the accused along with seven satellite/ shell companies in furtherance of a conspiracy with statutory and internal auditors allegedly cheated the bank by submitting forged financial statements to obtain undue credit limits and siphoned off the same for extraneous uses, causing wrongful loss of ₹102.87crore to the bank. The promoter-directors allegedly misappropriated assets of the company entrusted to them by using loaned money to donate annually to a trust run by the accused.