A senior bank official allegedly colluded with a greenhouse promoter and sanctioned loans to 58 borrowers for floriculture activities in Udhagamandalam district resulting in a loss to the tune of ₹14.36 crore to Bank of India.
Based on a complaint lodged by the bank authorities, the Central Bureau of Investigation (CBI) registered a case against S. Sivakumar, Senior Branch Manager, Udhagamandalam Branch; S.P. Rajan, proprietor, M/s Growwin Flori Tech, Coonoor, and unknown public servants on charges of criminal conspiracy and cheating.
Mr. Rajan had approached the bank official stating that he was engaged in the business of floriculture and construction of poly houses in Nilgiris district. He proposed to undertake activities such as erection of sheds, preparation of ground, deploying drip irrigation equipment, cultivation of flowers, selling them as cut flowers on behalf of the borrowers and depositing the sale proceeds in their loan accounts after taking a commission.
Accordingly, project reports were submitted to the bank wherein the project cost per borrower (farmer) was quoted as ₹33 lakh for flower cultivation. Without obtaining any administrative clearance or sanction from the bank’s zonal office, Mr. Sivakumar sanctioned and disbursed loans between August 2012 and February 2014.
No agreement
Though the borrowers had their own lands, the cultivation activity was proposed on leased lands. Though the promoter promised to enter into agreements with the farmers, no such documents were found in the project report or bank records. The loan disbursing authority did not obtain CIBIL score, legal opinion and valuation reports in the case of many borrowers.
The fraud surfaced when the loans accounts reflected in non-performing assets category.
When approached by bank officials, the farmers said they neither received any loan amount nor Growwin Flori Tech constructed any poly house on their premises. Also, the firm was not functioning in the given address.
Official dismissed
The accused company had diverted funds in collusion with the borrowers and the bank manager, the complaint said, adding that Mr. Sivakumar had misused his official position and violated the bank’s lending norms, systems and procedures by disbursing loan to the borrowers.
On the basis of an internal investigation report, the bank dismissed Mr. Sivakumar.
The investigation agency also invoked provisions under the Prevention of Corruption Act, 1988, against the suspects.
