The Central Bureau of Investigation has registered a bank credit fraud case against a textile company and five others, including lawyer Gautam Khaitan, an accused in the AgustaWestland VVIP chopper deal.
According to the CBI, IC Textile Limited — through its directors Sunil Kumar Jain, Gautam Khaitan, Ravinder Singh and Pramod Jain, besides other unknown persons and public servants — indulged in forgery and used fake documents to dupe Canara Bank of ₹28.73 crore.
The company, formerly known as Indocuount Chaoongham Textiles Ltd, was an export-oriented unit manufacturing cotton and synthetic blended yarn in Vadodara, with its office registered in Kolkata.
Misused credit facilities
The company was dealing with the bank since 1996, and had taken term loans from IFCI and IDBI. During 2006-07, Canara Bank sanctioned, or renewed, credit facilities of ₹28.73 crore to the company.
The unit, however, reported sick and was registered with the Board for Industrial & Financial Reconstruction in September 2004. BIFR appointed IDBI as its operating agency, directing it to formulate a revival package. The company also approached the Corporate Debt Restructuring (CDR) forum. Accordingly, IDBI prepared a relief package that was approved by IFCI. Canara Bank also approved the package in March 2005 by granting fresh limits and the company became a “standard asset”.
After infusion of funds, the company’s financials improved, but it could not perform as envisaged in the CDR package. The company shut the plant in November 2007. The account was again declared a non-performing asset in February 2008.
The company siphoned off ₹16.86 crore through fraudulent disposal of inventory and debts hypothecated to the bank and had not reduced the cash credit liabilities, the FIR said.
Production after closure
While the unit was closed in November 2007, the company claimed it had used inventory worth ₹1.5 crore to produce finished goods during October 2007 and March 2008. The book debts were also allegedly fudged.
The accused also used forged papers to encash letters of credit of ₹11.9 crore.
