CBI arrests former DGM of Canara Bank, mining firm owners for Rs 290-cr fraud

CBI arrests former DGM of Canara Bank, mining firm owners for Rs 290-cr fraud

Two promoters of a major mining company and a former senior official who worked in Canara Bank’s Bengaluru office were arrested by the CBI on the charges of causing a loss of Rs 290.77 crore to two banks.

The arrested are Manoj Jayaswal and Abhishek Jayaswal -- promoters of Abhijeet Group -- and T L Pai, then a deputy general manager and branch head of Canara Bank's Prime Corporate Branch in Bengaluru. The arrested were produced in the designated court in Kolkata.

The trio were arrested came in a case registered by the CBI in September 2015 on a complaint filed by Bengaluru branches of Canara Bank and Vijaya Bank. The accused father-son duo allegedly connived with Pai and cheated Canara Bank of Rs 218.85 crore and Vijaya Bank of Rs 71.92 crore.

According to the CBI, it came to light during investigations that the Jayaswals with the help of Pai cheated both the banks while executing an EPC (Engineering, Procurement, and Construction) contract for setting up of a coal based power project at Bihar’s Banka.

The project company of the group handed over the execution of the project to its infrastructure company. The former was required to pay mobilisation advance of Rs 157.9 crore in five instalments and the latter was required to give bank guarantee. Without the knowledge of banks, the project company executed an amendatory agreement as per which the infrastructure company was required to refund the mobilisation advance.

Refunded
“The major portion of the discounting proceeds of Letter of Credits issued by both the banks in favour of infrastructure company were refunded to the projects company under obligation of the said amendatory agreement,” the CBI said. The projects company then diverted the refunded amount for purposes other than for which the loan was sanctioned, it added.

During investigation, it also came to light that 13 companies under Abhijeet Group “borrowed money” from over 20 banks and financial institutions but the accounts have become NPA. Since 2014, the total outstanding loans are around Rs 11,376.77 crore.

It was also alleged that Pai recommended and forwarded credit proposals to the competent authorities of Canara Bank falsely confirming the assignment of bank guarantees worth Rs 157.9 crore given by the infrastructure company.
 

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