CBI books Karnal-based rice export firm, its partners in Rs 90 cr bank fraud case

The forensic audit of companys account red flagged several alleged irregularities like withdrawal of capital by the promoters, mismatch in balance sheets, transfer of funds to other current account and round tripping of funds, among others.

The CBI has filed an FIR against Karnal-based United Exporters and its four partners/guarantors for allegedly defrauding the Union Bank of India to the tune of Rs 90.22 crore, officials said Thursday.

The Central Bureau of Investigation (CBI) carried out searches at six locations after registering a case against the Basmati rice export firm and its partners/guarantors Harish Narang, Sudhanshu Narang, Samarth Narang, and Sangeeta Narang, the officials said.

The agency has booked the company and its promoters/guarantors under Indian Penal Code (IPC) sections of criminal conspiracy, criminal breach of trust, cheating, forgery for cheating, using as genuine forged documents, and criminal misconduct, they said.

The company had started the business with the export of Basmati rice and further diversified into the local market as well, the bank had alleged. ''The firm serves overseas customers in the Middle East, including Saudi Arabia and Iran, the USA and Europe, and also supplies in the domestic market in Maharashtra, MP, UP, Delhi, Rajasthan, Gujarat, Haryana, Punjab, West Bengal, and South India,'' the complaint from the bank, now part of the FIR, alleged.

The Union Bank of India alleged that the company was given a credit limit of over Rs 91 crore but started defaulting on repayments despite reminders and the account was declared a non-performing asset on June 30, 2018, the officials said. The forensic audit of the company's account red-flagged several alleged irregularities like withdrawal of capital by the promoters, mismatch in balance sheets, transfer of funds to other current accounts, and round-tripping of funds, among others. Between 2013-14 and 2017-18, the cumulative withdrawal of capital by promoters and guarantors was Rs 18.73 crore against which the partners inducted Rs 12.7 crore only, the bank alleged. Before the above exodus of capital, the entire partner's share capital had been eroded due to a loss of Rs 130.63 crore in FY 2011-12, it said.

''...the forensic auditor could not trace entries amounting to Rs 23.94 crore in these accounts confirming its belief that the borrower firm has been maintaining some other bank accounts in unknown banks,'' the bank alleged.

The complaint said the accused persons made round-tripping transactions to show the flow of money in the firm whereas ''in reality, there was no money of the firm itself in flow''. ''...all the money of the market as well as the complainant bank was being used to create a mirror image of cash flows, which was circulated in the accounts of the firm that inflated the turnover in the books of the firm,'' it alleged.