CBI court convicts two directors of Astral Glass, one banker
The directors have been sentenced to six months imprisonment and also fined ₹7.50 lakh each and the bank employee is sentenced to one year’s imprisonment and a fine of ₹30,000.
Mumbai: A special CBI court has convicted two directors of a company and a bank employee, for cheating Corporation Bank to the tune of ₹3.18 crore in 2006. The directors have been sentenced to six months imprisonment and also fined ₹7.50 lakh each and the bank employee is sentenced to one year’s imprisonment and a fine of ₹30,000.
As per the CBI case, Satish Bhat was the Chairman and Managing Director (CMD) and Vishwnath Nayak was the Joint Managing Director (JMD) of Astral Glass Pvt. Ltd. and the third accused Jagadeesh Shanbhag was the then Assistant General Manager of the Overseas Branch of the Corporation Bank.
The bank was offering export bill purchasing/discounting – credit for financing manufacturing only for export orders, which is also known as pre-shipment credit.
Under the head of Foreign Documentary Bill Negotiation/Purchase/Discounting Facility every purchased/discounted export bill is treated as a separate loan account by the bank, the original set of bill documents is sent by the bank to the importers (consignee) bank by courier.
The importer collects these documents and takes the goods in his possession by submitting them to a competent authority like Customs. After this, importers send the bill amount through their bank to the exporter Bank, which is the bank that has purchased the discounted export bill.
It was alleged that Astral Glass through Bhat and Nayak tendered 37 export bills to the bank for purchase from February 6, 2006, to March 03, 2006, for a sum of ₹3.18 crore. The bank discounted these bills, but it later became clear that the company had tendered bogus bills without exporting the goods and derived undue financial benefits to the extent of US$ 6,96,453.13 (approximately equivalent to ₹3.18 Crores), thereby cheating the Corporation Bank.
The bank then submitted a written complaint on June 10, 2009.
During the probe, CBI came to know that Shanbhag had approved discounting these 30 fake and forged bills of M/s Astral violating the rules. CBI claimed that he had facilitated the transfer of the amount generated out of the fake export bills from the PCFC account to the account of the company.
The probe also revealed that after discounting these 30 export bills, the bank sent them to the consignee Bank - 25 bills had been returned by the consignee bank. Further in 29 bills, it was found that no funds were received from the consignee. In the meanwhile, the bank settled the outstanding account by debiting the company’s cash credit account maintained at an Overseas bank. This bank substantiated that no export had taken place under those bills.