ICICI Bank of India has filed a petition in a US court against 11 executives of Mumbai-based diamond company Shrenuj and Co for allegedly defrauding the bank.

The bank says receivers were investigating the company's finances when they found outstanding letter of credit (L/C) and revolving credit obligations that in turn led them to find evidence of fraudulent transactions.

As a result of investigations, ICICI Bank says it found evidence of fraud and is now seeking to recover over US$12 million from the Shrenuj executives.

Credit facility

According to ICICI's petition, Shrenuj's US subsidiary SG had entered into a credit facility agreement in 2008 for US$20 million.

In March 2016, SG owed ICICI Bank US$18.8 million, of which US$3.6 million was accounted for by L/C obligations while US$15.2 million was due under revolving credit facilities.

According to ICICI Bank, a financial statement provided by SG in May 2016 showed it was not in a position to repay these obligations.

Fraud revealed

Subsequently, ICICI Bank had approached a court in Seattle to appoint a receiver for SG.

During the course of receivership proceedings, the receiver discovered alleged fraud and fraudulent transactions by SG to third parties.

ICICI Bank, through its New York branch, has now filed the case in Southern District Court of New York.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.