Former UCO Bank CMD Arun Kaul has been booked by the Central Bureau of Investigation along with an Infra company, its directors and others for allegedly cheating the bank of about Rs.738 crore.
The loan accounts were declared non-performing assets in July 2013.
On Saturday, the agency searched the premises of the accused persons at eight locations in Delhi and two in Mumbai.
Among those named in the FIR are Mr. Kaul, Delhi-based Era Engineering Infra India Limited, its chief managing director Hem Singh Bharana and six other directors, besides chartered accountants Pankaj Jain and Vandna Sharda.
Pawan Bansal of Mumbai-based Altius Finserv and several other public servants are also under investigation, said the agency.
The accused persons cheated the UCO Bank by siphoning off the loan amounts.
"It is alleged that the loan was not used for the sanctioned purposes and was secured by producing false end-use certificates issued by the chartered accountants and by fabricating business data," said an official.
Mr. Kaul, as the then CMD of the bank, allegedly helped the accused company in getting the loan.
Era Infra was sanctioned a term loan of Rs.200 crore in March 2010, by the managing committee of the board under multiple banking arrangements. It was for the purpose of repayment of its high-cost debt pertaining to the Central Bank of India, Punjab National Bank, IFCI and other creditors.
Apart from listing movable and immovable assets as collateral, Mr. Bharana had stood personal guarantee by showing his personal worth as Rs.181.99 crore.
After the loan amount was disbursed, it is alleged that almost the entire amount was diverted for unsanctioned purposes.
The chartered accountant, Pankaj Jain, allgedly did not mention about it in the end-use certificate.
The company was sanctioned another term loan of Rs.450 crore in October 2010. The funds were again not used for stated objectives, which included refinancing of high-cost debt. The amount of Rs.211 crore released as capital expenditure was also diverted, it is alleged.
