HYDERABAD: Central Bureau of Investigation has issued an FIR against Ralco Steels Private Limited promoters for Rs 70 crore loan fraud based on the complaint filed by the Bank of Baroda.
Apart from Ralco Steels CBI named directors Ramesh Cherukuru, Nagalaxmi Cherukuru, James Manohar Raj, DV Subba Rao as accused in the criminal conspiracy, forgery, cheating and criminal misconduct. Ralco steels was incorporated in November 2010 with Registrar of Companies at Vijayawada. The company had availed Rs 22 crore credit facility from Bank of Baroda Corporate Financial Services Branch at Hyderabad in 2011 January for setting up a plant in Bobbili in Andhra.
The plant is supposed to manufacture and supply hot rolled pre-engineered structures. The limits were subsequently enhanced up to Rs 97.2 crore in December 2011 by the Central Credit Committee of the bank. In 2014 April the accounted turned into Non-Performing Assets. Internal investigations by Bank of Baroda revealed that Ralco steels diverted the funds from the term loan disbursements for revenue expenditure instead of capital expenditure. It was also found that the funds were transferred to other companies which are not connected to the steel industry.
The company purchased eight acres of land from the loan amount and mortgaged the property to IDBI bank for loan enhancement. The investigation also found that directors are involved in the fund diversion, and the loan account has been declared a fraud account. The involvement of panel advocate and other bank officials is also suspected in the fraud.
The total loss caused to the bank is Rs 70.8 crore. In 2014 the company informed financial distress due to which restructuring of the loan was done. However, the company failed to pay instalments and terms of agreements were also not adhered. It was also revealed Ralco had mortgaged non-existent land to Bank of Baroda. The company failed to cooperate with the forensic audit of the accounts. It was found that the company has sent big amounts through RTGS and encashed to siphon off. Ralco Cargo movers and Srivalli Shipping and Transport were in the dock for receiving funds.