EOW books directors of 2 Assam firms for duping Mumbai-based NBFC of ₹114 crore
The economic offences wing (EOW) of Mumbai Police have booked five directors of two Assam-based vehicle loan finance firms for allegedly duping a city based non-banking finance company (NBFC) of ₹114 crore.
The two accused firms, which are revenue sharing partners (RSPs) of the complainant company, allegedly fraudulently processed loans for commercial vehicles and caused a huge loss to the NBFC.
On the complaint of Elphinstone-based company Fortune Integrated Assets Finance Limited’s operation deputy manager Jignesh Patel a few days ago, EOW’s general cheating unit has filed a case under the relevant Indian Penal Code sections.
The first information report (FIR), of which HT has a copy, is lodged against Kumar Gaurav and his wife Sharmishta Baruah – the directors of Echo Motors and Automobiles Pvt Ltd and Amarshakti Commerce and Industries, Guwahati, Assam – and three other directors.
The complainant NBFC provides loans for purchasing commercial vehicles (goods carriers and passenger vehicles). The loans are sanctioned to the applicant only through RSP. A firm is authorised as RSP by the company only after a thorough procedure of scrutinising agency’s antecedents. The RSPs send applications of people, who are looking for commercial vehicle loans, to the company and the company sanctions loan through RSPs.
“The RSP’s role is very important as it is the agency responsibility to check the antecedents of the loan seekers, their KYC (know your customer) details and financial potential for repayment,” said an officer.
In 2014, the complainant company signed an RSP agreement with Gaurav and Sharmishta’s Echo Motors and Automobiles Pvt Ltd, Guwahati. In 2017, Gaurav closed this company and started Amarshakti Commerce and Industries. Besides the husband-wife duo, there were three more directors in the company till May 2017.
Between November 21, 2014, and August 21, 2019, the complainant company distributed loans for 7,128 vehicles. But in 2018, NBFC allegedly detected discrepancies in the documents submitted by the two accused firms.
“Later, an internal scrutiny revealed that there was gross misappropriation and illegalities involved and many rules and laws were violated in the entire procedure of the loan-sanctioning system. Details of same vehicles and persons were misused by accused RSP agencies for multiple loans. The inquiry also revealed that in many cases, physical verification of the vehicle was not done. And most importantly, forged and bogus documents were used to fraudulently procure the loan,” said an EOW source.
The two accused firms have allegedly submitted forged and bogus documents in loans matters of 668 vehicles. In this, 361 vehicles existed only on paper. Many loan applicants have also been defaulted in paying for the equated monthly instalment (EMI), despite exhausting time limit. The RSP agencies, which also had responsibility of collecting EMIs from the loan recipients and send it to the finance company, allegedly misused the funds for personal gains, the FIR stated.
Thus, the two firms allegedly caused wrongful loss to the complainant NBFC to the tune of ₹114.19 crore in loan matters of 5,241 vehicles, the complaint added.
EOW has sought details from the banks and is analysing loan documents and collecting further evidence, an officer said.
Gaurav said that the allegations levelled against him and his company are false.
“We were summoned by EOW in this matter last year and our representatives had submitted all the required documents and evidence to the officers explaining our side of the entire dispute. EOW was then convinced from our replies. We don’t know how have they registered an FIR now. It’s a civil dispute and we have already filed a case against the complainant company in a court in Assam. There is possibility that EOW officers or the local police were kept in dark about the criminal case registered in Assam. We have not been contacted by EOW in connection with the said FIR. If they do so, we would certainly cooperate with the authority and furnish all the details of the deal and explain that we are not involved in any illegal practice.”