Moser Baer under CBI scanner for loan 'fraud'

Optical disc maker Moser Baer has come under the scanner for a Rs 354.51 crore "loan fraud" with the CBI registering a case against the company and five persons, including Madhya Pradesh Chief Minister Kamal Nath's nephew Ratul Puri.

CBI on Sunday conducted searches at six places, including the office of M/s Moser Baer India Ltd at Okhla Industrial Area in south Delhi and at the residential premises of present and former Directors of the company in the capital, after registering an FIR on a complaint filed by Central Bank of India last Friday.

The agency has invoked charges of criminal conspiracy, cheating and forgery as well as relevant sections of the Prevention of Corruption Act, 1988.

Moser Baer Managing Director Deepak Puri, whole-time Director Nita Puri, Directors Sanjay Jain and Vineet Sharma, as well as former Executive Director Ratul Puri, were named as accused.

Ratul Puri is already under the scanner in connection with investigations into the multi-crore AgustaWestland deal. On Saturday, a Delhi court refused to grant stay to the non-bailable warrant (NBW) issued against him in the money laundering case linked to AgustaWestland case.

According to the FIR, a consortium of 14 banks have given crores of rupees as loan to the company. The Central Bank has identified that the company has defrauded it of Rs 354.51 crore.

“The funds granted by the banks have been misused and misappropriated by Moser Baer and its Directors/promoters for their own personal use...have also committed fraud in respect of reporting book debts, which were also one of the primary securities of the bank...Moser Baer, through its Directors/promoters, has forged and fabricated documents and induced Central Bank of India to release funds,” the FIR said quoting the complaint.

It also claimed that Moser Baer made substantial investments of Rs 1,456.12 crore in subsidiaries. "Instead of making efforts for redemption of its investments and recovery of receivables resulting out of sales to related parties, Moser Baer chose to write-offs and make provisions without prior approval" of the Central Bank.

The company also allegedly gave corporate guarantees worth Rs 2,051.87 crore on behalf of its subsidiaries but no sanction was taken before taking such a "huge exposure".

"They are already in default with their lenders...This act of giving guarantees beyond the net-worth and that too in disputed waters, without seeking permission from the complainant bank clearly points towards the intention of the accused to lure the lenders fraudulently into lending to its subsidiaries and thereby exposed them to potential financial loss," it said.

Noting that Moser Baer's account was declared as "fraud" in April, the complaint claimed that finished goods, semi-finished goods and raw material were "dishonestly and fraudulently" removed by the company to prevent any claim by the lenders to realise their debts.

It also said the RBI guidelines do not permit a borrower company to operate and maintain accounts in banks outside the consortium from which it has taken loans. However, Moser Baer allegedly maintained accounts with a large number of banks.

Also, the company did not deposit the sales proceeds generated from its business or working capital funds. They were routed through banks outside the consortium, thereby "indicating the fraudulent intentions for siphoning off the monies", the complaint said.