Documentary Credit World

India’s Central Bureau of Investigation (CBI) has registered a first information report (FIR) against developer Unity Infraprojects Limited (UIL), its chairman and managing director Kishore K Avarsekar, three other directors (his wife and two sons), and five additional entities which served as corporate guarantors, for allegedly defrauding the State Bank of India (SBI) and 15 other consortium lenders of INR 3,800 crore (USD 457 million).

Filed 14 September 2023, the FIR is based on a complaint letter of 17 August 2023 submitted by SBI to the CBI, contending that UIL and other accused siphoned bank funds by carrying out fictitious transactions and distorting accounting records.

According to SBI’s complaint, UIL had been banking with it since 2004 and had received various fund-based and non-fund- based credit facilities totaling INR 3,800 crore from SBI and 22 other lenders. The complaint further informed that the account became a non-performing asset in June 2014 and was classified as fraud more than five years later following a fraud identification committee meeting in November 2019.

Aspects of the alleged fraud are described in the FIR as follows: “The said company, by way of fictitious transactions undertaken by it through fraudulent Letter of Credit trade model, improper adjustment entries by fudging data, diversion of funds through non-consortium accounts, diversion of funds through related parties and unexplained excess pay-outs, siphoned off the funds of State Bank of India and other consortium banks, and thereby cheated these banks”.

While the total number of lenders alleged to have been defrauded is 23, the complaint states that only 16 banks gave their estimated loss and mandate to file the complaint. The Indian Express reports that key lenders include Bank of Baroda, Central Bank of India, ICICI Bank, Indian Bank, and Union Bank of India.

(Source: The Indian Express)

• ← prev
• next →