CMD, 2 directors of listed firm arrested for cheating banks
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Last Updated: Friday, April 02, 2010, 19:05
New Delhi: CBI has arrested the Chairman and two directors of a listed company in Ahmedabad for allegedly defrauding Andhra Bank of around 21 crore by submitting fake and forged documents.

The three -- Chairman and Managing Director Subash C Mehta and his two sons and Directors of the company Pradeep and Deepak -- were arrested by the agency.

CBI conducted searches at the premises of the accused persons and the company -- Vishal Export Overseas Limited -- which resulted in recovery of various documents that were being scrutinized for further investigation, CBI spokesperson said in a release here.

The arrested were produced before the Additional Chief Judicial Magistrate, Ahmedabad yesterday, which sent Subhash to judicial custody till April 12 and his sons to two days of police custody.

The Bank Securities and Fraud Cell of CBI, Mumbai had registered a case against the three on the complaint of Andhra Bank.

The company, listed in Ahmedabad exchange, is engaged in the export of agricultural commodities and also claimed to possess the status of Star Export House. The company had availed funds like Packing Credit Facility, Foreign Bill Discounting facility, Letter of Credit facility from a consortium of about 23 banks to the tune of around Rs 500 crores between 2004 and 2006, it said.

The company allegedly cheated other banks of its funds by adopting fraudulent means like furnishing bogus and forged documents to the bank, by getting Letters of Credit opened in favour of its own associate companies without underlying genuine business transactions, CBI claimed.

Besides, the company also diverted the funds sanctioned by banks for its own purpose and failed to utilise for the purpose for which they were sanctioned.

CBI had earlier registered three cases against this company and its Directors on the complaint filed by Punjab National Bank, Vijaya Bank and UCO Bank alleging cheating of its funds by the company to the tune of around Rs 190 crores.

The allegations were that the company claimed to have exported diamonds to its associate companies in foreign countries after availing funds from the bank for other purpose.

They also allegedly furnished the same set of documents for availing different facilities from different banks and thereby, cheated the financial institutions.


First Published: Friday, April 02, 2010, 19:05

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