The CBI has filed a case against Vadodara-based Diamond Power Infrastructure Limited (DPIL) and its directors, besides unknown public servants, for allegedly cheating 11 banks to the tune of ₹2,654 crore. The loan accounts were declared non-performing assets in 2016-17.
On Thursday, the agency conducted searches on the premises of the company and its functionaries.
The CBI has alleged that DPIL, promoted by S.N. Bhatnagar and his two sons Amit and Sumit Bhatnagar, managing director and joint managing director, indulged in cheating.
The company is into manufacture of cables and other electrical equipment. “DPIL, through its management, fraudulently availed itself of credit facilities from a consortium of 11 banks [public and private] since 2008, leaving behind an outstanding debit of ₹2,654.40 crore as on June 29, 2016,” said an official.
Defaulters list
The company and its directors got term loans and credit facilities, though they had already been on the Reserve Bank of India’s defaulters list and the ECGC Caution List at the time of initial sanction of credit limits by the consortium, it is alleged.
According to the CBI, the company had been submitting false stock statements to the lead bank to get more drawing power in their cash credit accounts. It is also alleged that DPIL extensively used the cash credit limits for getting a large number of Letters of Credit, many of which could not be honoured by the company and were, thus, charged on the credit limit.
It is learnt that since 2008, about 1,000 such Letters of Credit issued by Bank of India alone devolved, which included at least 16 letters amounting to ₹110.79 crore issued in the name of DPIL’s sister concern Ruby Cables.
DPIL had also invested ₹16.70 crore in group companies out of the cash credit limit without prior sanction. Interest-free loans were given to group-related parties. The accounts were restructured in March 2015, but from February 2016 onwards they started turning into NPAs, the CBI alleges.
