CBI books city-based fruits processing firm for fraud

The Central Bureau of Investigation has booked a city-based fruits processing firm on charges of cheating three banks to the tune of ₹217.16 crore.

Acting on a complaint lodged by a consortium of banks led by the State Bank of India, the CBI’s Economic Offences Wing registered a case against M/s Oceanic Tropical Fruits Private Limited, its directors A. Joseb Raj, Vimala Joseb and James Walter for entering into a criminal conspiracy to cheat the SBI, ICICI and the Central Bank of India.

The agency said in its first information report (FIR) that the directors of the company diverted loan funds, falsified/fabricated Books of Accounts and misused the borrowed funds. They also diverted the receivables of the company to other companies by submitting fake vouchers and routed the money through other banks without the consent of the consortium of banks.

The SBI said in its complaint that M/s Oceanic Tropical Fruits Private Limited, promoted by its directors, was into the business of processing fruits like mangoes, guavas and papayas besides manufacturing tomato paste with aseptic packaging in drums and cans. The company had its processing and manufacturing facilities at Marakkanam, near Puducherry, and Annur, near Chittoor, in Andhra Pradesh. In 2011, it also entered into a contract with M/s PepsiCo India Holding Private Limited to work as a co-worker for one of their soft drinks for a period of 10 years.

Forensic audit

After the company approached the banks for funding, the SBI (then State Bank of Travancore), ICICI and the Central Bank of India sanctioned ₹178.45 crore, ₹75.88 crore and ₹20 crore respectively. After the banks brought the company’s loan accounts under the non-performing asset category, an external audit firm was assigned the task of investigating the fraud angle.

It was found during the inquiry that the transactions in the bank statement were not traceable in the company’s book of accounts. There was a potential inconsistency in the purchase transactions and unusual transfer of funds to other companies. The forensic auditor observed an upward revaluation of fixed assets (building and machinery) to the tune of ₹67.41 crore.

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Printable version | May 25, 2022 7:40:40 pm |