A court in Calcutta is to hear a case in which a businessman and bank officials are alleged to have fraudulently negotiated export bills drawn on a letter of credit (L/C), despite another bank's refusal to do so because it found gross discrepancies in the documents.

The case involves the alleged siphoning off of more than US$1 million from the Strand Road branch of Oriental Bank of Commerce (OPC).

Forged documents

Assistant general manager of OCP, O P Agarwal, and the branch's chief officer in the export department Urmilenendu Mukhopadhyaya, allegedly entered into a criminal conspiracy with the proprietor of Hindustan International, Gopinath Das.

Essentially, the conspirators are accused of fraudulently allowing negotiation of export bills based on forged documents. Prosecutors allege that OCP was swindled out of around US$1.2 million.

Discrepancies notices

The court has heard that on 21 October 2005 Agarwal opened a current account at OCP in favour of Hindustan International, despite the not following 'know your customer' procedures now demanded of banks in India.

Das meanwhile approached a bank to negotiate export documents worth around US$1.55 million drawn on a L/C issued in Singapore. After finding gross discrepancies in the documents, that bank refused to accept the L/C.

Rules violated

Prosecutors say the proprietor of Hindustan International subsequently presented the refused L/C to OCP where Mukhopadhyaya ostensibly verified the L/C and its associated documents and forwarded these to Agarwal, who sanctioned the negotiation of export bills.

Neither banker sought to establish the credit worthiness of Das or Hindustan International alleges the prosecution, which claims that negotiating the export bills violated banking rules.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.