CBI registers FIR against Netherlands-based firm in alleged Rs 151-cr banking scam

The Central Bureau of Investigation (CBI) has registered an FIR against Ballarpur International Holdings (BIH) BV, a Netherlands-based enterprise, for an alleged banking scam amounting to Rs 151 crore, officials said on Saturday.

The company is promoted by Avantha International Assets BV and serves as a subsidiary of Ballarpur Industries Limited (BILT), a paper manufacturing establishment under the Avantha Group promoted by Gautam Thapar that is facing a separate probe allegedly involving Yes Bank founder Rana Kapoor.

Thapar and the Avantha group are not listed as accused in the FIR.

BIH had no operational activity of its own, and its income was solely derived from interest and dividends earned from the group of companies, the officials said citing the FIR.

Initially, on December 16, 2010, IDBI Bank had sanctioned a foreign currency loan of USD 60 million to BIH, which was later repaid by the company, the bank had said in its complaint that became a basis for the FIR, they said.

Subsequently, in September 2015, under a Multiple Banking Arrangement, another loan worth Rs 20 million was sanctioned by the bank, with the objective of facilitating downstream investment by extending an intercompany loan to BIH, the bank alleged.

To secure the loan, BILT had provided a Corporate Guarantee, given its impressive net worth of Rs 4,000 crore.

However, BIH failed to pay interest dues on April 1, 2019, and as a result of inherent weaknesses in the company, the account was categorised as a Non-Performing Asset (NPA) by the Statutory Auditors in May 2019, with effect from March that year, the officials said.

The National Company Law Tribunal (NCLT) has admitted the claim of IDBI.

The bank launched a forensic audit in 2019, which revealed that the funds were allegedly utilised for purposes other than those for which they were sanctioned, they said. Moreover, the funds were allegedly transferred to related parties without the requisite documentation.

The forensic audit report divulged that BIH had allegedly utilised a significant proportion of the loan amount in manners not consistent with the bank's sanction terms, which the auditor termed as "diversion of funds," amounting to "fraud."

On January 25, 2021, the bank declared the account as fraud amounting to Rs 151.01 crore, it alleged.