Two FIRs against city textile company for duping banks of ₹59.26 crore

The accused company and its directors availed loans from the two banks by mortgaging their textile machinery and stocks

Mumbai The Economic Offences Wing (EOW) of Mumbai police has registered two first information reports (FIRs) and booked seven directors of a Lower Parel-based textile company for allegedly duping two multinational banks; DBS Bank and Standard Chartered Bank, to the tune of ₹59.26 crore.

The EOW first conducted preliminary inquiries in the banks’ complaints and after cognizable material was found in the complaints (Getty Images/iStockphoto)

The accused company and its directors availed loans from the two banks by mortgaging their textile machinery and stocks. The company however, failed to repay the loans. Also, the company and its directors with a dishonest intention sold off the mortgaged properties to other parties without letting the two banks know, thus causing wrongful loss to them, the police said.

In past one week, two FIRs were registered against SKS Textile and its directors Sukhraj Shah, Vicky Shah, Sahil Shah, Sapna Shah, Mihir Manek Mahendrakumar, Nokhelal Verma and Lalita Kumari and others under sections of 420 (cheating), 406 (criminal breach of trust) and 34 (common intention) of the Indian Penal Code.

The EOW first conducted preliminary inquiries in the banks’ complaints and after cognizable material was found in the complaints, the FIRs were first registered at the MRA Marg police station and Bandra-Kurla Complex police station and later EOW’s Banking-2 unit took over the cases for further investigations.

In the first case, which was registered with the MRA Marg police station on Friday, the DBS Bank is the complainant. On behalf of the bank its senior executive Pankaj Maru stated in the complaint that SKS Textiles Private Limited had taken a loan of ₹26.74 crore from DBS Bank on April 29, 2015. For this, the company had mortgaged their textile machines and stock of its factory at Bhiwandi with the bank. But the accused company and its directors allegedly sold the mortgaged properties without letting the bank know about it. This is a violation of the terms and conditions of the loan agreement. The company failed to repay the loans. As a result, the bank suffered a loss of ₹27.61 crore which included principal loan amount and interest, EOW sources said.

In the second case of the Bandra Kurla Complex police station, Kamal Vyas, an executive of Standard Chartered Bank, is the complainant. Vyas’s complaint states that the loan was given to SKS Textile company. The accused company and its directors sold the mortgaged properties. Bank’s complaint claims that the accused company disposed of the textile machines without securing bank’s permission. As a result, the bank suffered a loss of ₹31.65 crore. The police have also named a loan guarantor as an accused in the case, EOW sources added.

EOW has sought documents of the loan agreement from the banks and other details of the transactions of the bank with the accused company. The EOW may open Look Out Circular (LOC) against the accused, if required, an EOW officer said.