Varron Grp fraud worth ₹3,000 crore

Nagpur: Varron Group, whose promoter the late Shrikant Sawaikar’s assets worth Rs12 crore were provisionally attached by the enforcement directorate on Wednesday, was once welcomed as a large investor creating job potential in Vidarbha. The company, which has taken up land at Chimnazari along Nagpur-Chandrapur road, had plans to start a unit making specialized auto components using aluminium scrap in around 2016-17.
In 2021, ED had attached assets worth Rs164 crore. Total attachment so far stands at Rs179 crore. As against that the loan fraud in which ED is probing the money trail is estimated to be worth Rs3,000 crore.
Considering the size of investment, the Varron’s case was directly cleared from the industries department’s headquarters in Mumbai. The company had proposed an investment of Rs118 crore and generation of 150 jobs. Even as the work on the plant had begun, the business soon failed, said sources privy to the development.
Eventually, the company was embroiled in cases of bank fraud and its working capital funding was stopped by financial institutions, said a source. A separate company Varron Autokast Limited was formed for the Nagpur project.
The case was later taken up by the ED which on Wednesday attached 12 properties belonging to Sawaikar worth over Rs12 crore located in Nagpur, Pune, Ratnagiri and Goa. According to the ED press release, the agency had initiated investigation on basis of FIRs registered by CBI for an alleged loan fraud worth Rs3,000 crore.
ED says its investigation has revealed that late promoter had fraudulently discounted 246 forged bills backed by letters of credit worth Rs300 crore opened by Canara Bank. There was no real movement of goods and the money was used to pay earlier loans. The earlier loans were also not serviced regularly and proceeds were diverted to other than stated purposes, as per the ED.