In another bank fraud after PNB, the Central Bureau of Investigation has registered a case against former Chairman-cum-Managing Director (CMD) of UCO Bank — Arun Kaul and two private companies — Era Engineering Infra India ltd (EEIl) and Altius Finserve Pvt ltd and their directors and a few chartered accountants for allegedly cheating the public sector bank of Rs 621 crore.
After registering the case, searches are currently being conducted at 10 places (08 in Delhi and 02 in Mumbai), which include the office premises of the companies, the chartered accountants and residences of the accused. Kaul was the CMD of UCO Bank between 2010 and 2015, before the government refused to extend his tenure. Kaul, the CMD during that period, allegedly helped the accused company in securing the loan.
Other persons who have been named in the complaint are M/s Era Engineering Infra India ltd. (M/s EEIl), its CMD Hem Singh Bharana, chartered accountants Pankaj Jain and Vandna Sharda, Pawan Bansal of M/s Altius Finserve Pvt. ltd, among others.
CBI Spokesperson Abhishek Dayal confirmed that the accused had defrauded UCO Bank to the tune of Rs 621 crore approximately.
It was alleged that the accused persons in pursuance of criminal conspiracy defrauded UCO Bank to the tune of Rs 621 crore (approx) by diversion and siphoning of bank loans. It is further alleged that the loans were not utilised for the sanctioned purpose and was secured by producing false end use certificates issued by the chartered accountants
EEIl, according to its website, is engaged in the business of construction/engineering in roads, highways, power, metro, aviation, social infra, industrial refinery etc. It claims to work for some the biggest names in the industry.
However, this incident and much bigger ones that have hit Indian banks hard over the past few months have led to several regulatory restrictions, which has made life difficult for genuine traders seeking credit.
The banking sector has been reeling under the revelation of numerous frauds and loan defaulters ever since PNB revealed that it detected fraudulent transactions worth over Rs 13,600 crore in its mid-corporate branch at Brady House, South Mumbai. PNB had alleged that two employees had “fraudulently issued letters of Undertaking (loUs) and transmitted SWIFT instructions to the overseas branches of Indian Banks” to raise buyers credit for companies of billionaire diamond jeweller Nirav Modi without “making entries in the bank system”.
Over the past few weeks, several other banks have come under the government's scrutiny, with ICICI Bank's Chairman and MD Chanda Kochhar facing quid pro quo allegations for a number of Rs 3,250 crore loaned to Videocon Group. Fearing such hidden incidents of fraud eroding the banking sector — both PSB and private sector — the RBI has instructed banks to change leadership frequently. In another loan fraud case in which of Rs 5,280 crore was taken by diamond trader Mehul Choksi and his companies from a consortium of 31 banks led by ICICI Bank..
In a separate matter, on the complaint of Punjab National Bank (PNB), CBI has filed a case against SSK Trading Pvt ltd and its directors for cheating six banks including PNB of Rs 187.29 crore.