Four convicted in ₹6.82 crore software export fraud

A CBI court convicted four, including businessman Brian Castelino, in a ₹6.82 crore loan fraud, sentencing them to one year in prison and fines.

MUMBAI: A special CBI court on Tuesday convicted four people, including businessman Brian Mario Castelino, his wife Rajini Castelino, their company R Tec Systems (India) Private Limited, and former Corporation Bank official Alam Mahmud Shaikh, in a ₹6.82 crore loan fraud. The convicts were sentenced to one year of rigorous imprisonment and fined ₹25,000.

Four convicted in ₹6.82 crore software export fraud

The court found that the accused had conspired to cheat the Corporation Bank’s Ghatkopar (West) branch by fraudulently availing post-shipment credit based on 28 falsified Softex forms (forms related to the declaration of software export), and fabricated software export invoices of C-Bay System Limited, a healthcare company. Post-shipment credit refers to a payment offered by banks or financial institutions to exporters after goods have been shipped, but before the importer has received the payment from the importer. It allows exporters to continue their operations without waiting for the full payment cycle.

According to the court the original Softex form was given to the bank, and it did not bear a number, nor the name and signature of the certifying officer. As per regulatory procedure, the Software Technology Parks of India (STPI), an organisation under the Ministry of Electronics and Information Technology, focused on promoting software exports, certifies three copies of such Softex forms. The original is sent to the Reserve Bank of India (RBI), and a duplicate is returned to the exporter. “The submission of original form without certification shows that fraud has been played on the Bank,” the court ruled.

Special judge Amit V Kharkar convicted the accused under several sections of the Indian Penal Code, including section 120 B (criminal conspiracy), section 420 (cheating), section 468 (forgery) and section 471 (using a forged document as genuine). Shaikh, who served as the Forex manager at the bank, was additionally held guilty under section 13(1)(d) and section 13(2) of the Prevention of Corruption Act, which deals with misuse of official position and its punishment.

Shaikh was held complicit for approving the fake documents. “It is proved that the approval note was put up by the fourth accused,” the court said, adding that he had “abused his official position” and enabled the fraud.

The court noted that the bank had given the accused over ₹6.82 crore based on 35 export invoices, of which only seven were certified, and the rest were either rejected or unverified. The court also added that two houses in Vashi, already mortgaged with another bank, were offered as fresh collateral to secure loans from Corporation Bank.