CBI books CIAL, its directors in cheating case

The agency says they have allegedly caused a loss of over ₹136 crore to Punjab National Bank

The Central Bureau of Investigation has registered a cheating case against Corporate Ispat Alloys Limited (CIAL) and its directors for allegedly causing a loss of over ₹136 crore to the Punjab National Bank.

Among those named as accused are Manoj Kumar Jayaswal, Ravindra Jayaswal, Siddhartha Jaiswal, the then promoter-director Abhishek Jayaswal, then director Prakash Jayaswal, then whole-time directors V.S. Garg and Rajendra Kumar Ghantara, and then director M.S. Kapur.

Term loan

The bank, as part of a consortium of lenders, had sanctioned a term loan of ₹75 crore to the company in June 2010. The consortium agreement was for about ₹329 crore.

The loan, which was declared non-performing asset in September 2013 and a fraud in June 2019, had been granted for the development of a coal block and the setting up of coal processing and washery plant at Chitrapur in Jharkhand’s Latehar.

It is alleged that the company, its guarantors and directors indulged in sham transactions and diverted the funds.

As alleged in the FIR, CIAL appointed Abhijeet Project Limited as the engineering procurement construction contractor for the project and disbursed the money. The contractor has two wholly-owned subsidiaries and as per the audited financials of Abhijeet Enterprises Limited, which is a subsidiary, significant amounts had been invested in more than 500 companies, which in turn again invested in CIAL.

Fund rotation

Therefore, there was a circular rotation of the fund from one company to another and in furtherance to that, Abhijeet Projects impaired about ₹965.47 crore invested in Abhijeet Enterprises. The company lost such money, which in turn was that of CIAL, as alleged.

Further, CIAL had transferred about ₹108 crore to one Bahubali Properties Limited, which had no business as those relating to it. About ₹63.45 crore was later returned. Another amount of ₹142.38 crore was transferred to CIAL subsidiary, Corporate Power Limited, which extended up to ₹1,126.04 crore paid from the Axis Bank account of CIAL, the FIR said.

Share premium

“The CIAL has brought ₹1,587.76 crore by way of share capital and securities premium from its holding company, Abhijeet Ventures Limited. But, it has been found that share premium consists of ₹1,584.09 crore and only ₹3.67 crore is share capital,” it said, alleging that there was clear manipulation and fraudulent diversion of funds.

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Printable version | Feb 21, 2020 10:04:50 PM |

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