The CBI on Tuesday carried out searches at 13 locations, including the premises of the present and former directors of Mumbai-based private firm Frost International which has been booked by the agency for allegedly cheating a consortium of 14 banks to the tune of Rs 3,592.48 crore minus interests accrued on the defaulted amount.
The FIR comes following a complaint from the Kanpur Zonal office of Bank of India, which alleged that the directors had worked under the guise of undertaking merchanting trade without genuine business.
This is understood to be the biggest default reported by public sector banks to the CBI after January 2018 when disgraced diamond traders Nirav Modi and Mehul Choksi fled the nation causing a loss of over Rs 13,000 crore to the Punjab National Bank.
The Bank of India in its complaint, which is now part of the CBI FIR, stated that Frost International's account had started showing signs of stress from January, 2018 and later became a non-performing asset.
The probe agency carried out searches at 13 locations including the premises of the company, its directors Uday Desai and Sujay Desai and other former and present directors and guarantors in Mumbai, Delhi and Kanpur, officials said.
Besides the company and directors, the agency has booked 11 more entities which include three Kanpur-based companies — RK Builders, Globiz Exim Pvt Ltd and Nirman Pvt Ltd — represented through their directors.
These companies were corporate guarantors for Frost International. These firms had defaulted in meeting payment obligation towards the lending banks of the consortium led by Bank of India, they said.
The company and its directors, guarantors and unidentified others submitted forged documents, diverted and siphoned off the bank's funds, leading to the loss of over Rs 3592.48 crore.