CBI Registers Rs 109 Crore Loan Default Case Against CMD Of Simbhaoli Sugars Ltd.

| February 26 , 2018 , 11:50 IST

In the second FIR registered in 3 days by the Central Bureau of Investigation (CBI) on the complaint of the Oriental Bank of Commerce (OBC), the CBI has filed a case against Simbhaoli Sugars Ltd for allegedly cheating the bank of Rs 109 crore in 2011 on the pretext of financing sugarcane farmers.

Around 13 people connected with Simbhaoli Sugars Limited, one of the largest sugar refining companies of India, have been named in the case by the CBI, including Punjab Chief Minister Captain Amarinder Singh's son-in-law Gurpal Singh, the Deputy General Manager of the sugar firm.

Apart from Singh, Simbhaoli Sugar’s Chairman and Managing Director Gurmit Singh Mann and 8 others including CFO, executive and non-executive directors of the company and unknown officials of the bank have been named in the FIR.

The CBI has alleged that Oriental Bank of Commerce sanctioned a loan to Simbhaoli Sugars worth Rs 148.59 crore in December 2011 after the company approached the public-sector bank with a proposal to finance sugarcane farmers with a maximum limit of Rs 3 lakh per farmer.

The company submitted to the bank names and details of the farmers involved in the scheme after which the bank's Hapur branch disbursed loans to 5,762 farmers between January and March 2012 worth the total loan amount. The amount was lent to the farmers through individual loan accounts and credited to the current account of Simbhaoli Sugars based on an undertaking given by the company regarding equipment and supplies provided to the individual farmers.

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It was later discovered that the company had issued improper KYC certificates in the names of the farmers and instead transferred the funds in its current account to accounts held by the company in other banks.

In March 2015, the loan amount of Rs 148.59 crore to Simbhaoli Sugars was declared as a non-performing asset (NPA) and a fraud in May 2015 for an outstanding amount of Rs 97.85 crore. Despite the existing NPA, the Oriental Bank of Commerce sanctioned another corporate loan to Simbhauli in January 2015 worth Rs 110 crore to pay its outstanding loan of Rs 97.85 crore.

The corporate loan also turned NPA on November 29, 2016, turning the first loan of Rs 97.85 crore as an alleged fraud and the new corporate loan of Rs 109.08 crore as fresh outstanding, said CBI spokesperson Abhishek Dayal.

A few days back, the CBI, on the complaint of OBC, had filed a case to probe a Rs 390 crore fraud committed against the bank by Delhi-based Dwarka Das Seth International diamond trader Sabhya Seth and associates.