CBI books Mehul Choksi in ₹55 crore bank fraud

CBI officials said the Canara Bank and the Bank of Maharashtra had under a consortium arrangement, sanctioned working capital limits of ₹30 crore and ₹25 crore, respectively.

Mumbai: The Central Bureau of Investigation (CBI) has registered an offence against fugitive diamond trader Mehul Choksi and his Bezel Jewellery (India) Pvt Ltd. for allegedly defrauding a consortium of Canara Bank and Bank of Maharashtra to the tune of ₹55.27 crore. Choksi is also a prime accused in ₹13,850 crore fraud at state-run Punjab National Bank (PNB).

CBI officials said the Canara Bank and the Bank of Maharashtra had under a consortium arrangement, sanctioned working capital limits of ₹30 crore and ₹25 crore, respectively.

CBI officials said the Canara Bank and the Bank of Maharashtra had under a consortium arrangement, sanctioned working capital limits of ₹30 crore and ₹25 crore, respectively.

The credit facility, they said, was sanctioned for manufacturing and sale of gold and diamond studded jewellery, but the funds were used by the company to repay its long-term borrowings.

The central agency claimed that in the initial period, the company repaid its long-term borrowing of ₹18 crore to its parent company and thereby diverted the entire limit of ₹10 crore of Canara Bank to said parent company on the date of availing the loan itself.

The banks have also alleged that the company did not route any of the business transactions through the account and the transactions which appeared in the account were with their group concerns only, indicating diversion of funds.

Further, a bank guarantee of ₹20 crore which was being availed from HDFC Bank was also invoked and the same was paid by Canara Bank.

It was also alleged that the company had entered into fraudulent transactions and defaulted on payment obligations towards the banks by diverting and siphoning off the banks’ funds in conspiracy with others causing a loss of ₹55.27 crore to the banks.

CBI had on Thursday also conducted searches at three premises of the accused in Mumbai which led to the recovery of some incriminating documents/articles.

The agency on Tuesday registered another case on the complaint from Union Bank of India against the Mumbai-based private company and three of its directors and others for causing a loss of ₹35.89 crore to Union Bank of India.

CBI investigation has revealed that PNB had reported a fraud amounting to ₹7,080 crore in respect of entities controlled by Mehul Choksi. The entities also enjoyed a credit exposure from a consortium of 32 banks and these banks have reported outstanding balance to the tune of ₹5,099.74 crore with respect to those entities as on December 31, 2017, and the total fraud amount was likely to exceed approximately ₹12,100 crore in respect of the entities controlled by Choksi.