CBI files cheating case against firm

"Incriminating documents seized during searches"

K.T. Sangameswaran

CHENNAI: The Economic Offences Wing of the Central Bureau of Investigation here is probing a major scam in which a city-based company cheated a Central Government financial institution to the tune of Rs. 29 crores.

The agency has registered a case against the Managing Director and a Director of the company under Sections 420 (cheating and dishonestly inducing delivery of property), 120-B (criminal conspiracy) and 417 (punishment for cheating) of the Indian Penal Code. Searches were conducted and incriminating documents seized, CBI sources told The Hindu.

Windmills erection

The sources said the company, located at Nungambakkam, obtained a loan of Rs. 11 crores from the financial institution in 1996 after stating that the amount was for erecting windmills in and around Coimbatore. As per the proposal, the windmills were to have been put up for selling electricity. However, the loan was not repaid and till 2002 the borrowed money along with the interest accumulated to Rs.29 crores. When the finance company officials went to the site for inspection, the plant and machinery, against which the loan was sanctioned, had been illegally shifted.

The sources said the institution, which lent the money, did not file any complaint. The CBI registered a case and was conducting investigation. As a follow-up, a search was conducted in the company and its factory here a week ago.

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