Punjab National Bank (PNB), which was defrauded of Rs 11,400 crore by Nirav Modi, has been hit by another scam, this time by the Hanjer Group of companies.

New Delhi: Punjab National Bank (PNB), which was defrauded of Rs 11,400 crore by fugitive diamantaire Nirav Modi, has been hit by another scam. According to top sources in the Central Bureau of Investigation (CBI), the public sector bank approached the agency against Hanjer Biotech Energies Private Limited after a forensic audit revealed that more than Rs 200 crore — extended as credit to the companies under the group in India and abroad — has been siphoned off, and the account has been declared a Non-Performing Asset.

Hanjer Biotech deals in solid waste processing through multi-product recycling and waste minimisation. CBI sleuths said preliminary investigation found that the loan money meant for legitimate business transactions was routed for other purposes in collusion with suppliers of machinery and other equipment.

Sources said the firm's account with PNB India could take a hit of Rs 85.65 crore, while its London branch, which had sanctioned Rs 125.40 crore, has been declared a fraud, and they are in the process of gathering more details.

Citing details gathered so far from the bank, investigators said the money was siphoned off through a nexus of suppliers with close links to the Hanjer Group. Sources said the role of four PNB officials is also being investigated. It has been alleged that a fresh term loan was approved without regularisation of previous dues.

CBI officials have unearthed information on five companies allegedly involved in swindling the money — Navi Infra Engineering Private Limited, Munshi Manufacturing Co., Navi Engineering Works, Enviro Infratech Co. and Yes Engineering Co. Sources disclosed that all these suppliers of plant and machinery have been using common email IDs and addresses. PNB has alleged that these companies have common promoters and partners and appear to be entities related to the Hanjer Group. Sources said certain funds received by M/S Navi Infra had been re-routed to M/S Huma Synthetics Private Limited, a company owned by the promoter of the Hanjer Group.

"These supplier firms, or shell companies, were created to receive the money from the bank on the pretext of payment for machinery, but ultimately, the money was channelled to the account of promoters. It is clear that funds had been transferred by the machinery suppliers to the entities that were directly or indirectly controlled by the Furniturewala family," sources said.

There are some startling findings with regard to this case — GN Malik is the promoter and director of Navi Infra, and his son Nur Mohammed Malik is the director of Shalimar Textiles. Furthermore, Shalimar Textiles is promoted by Irfan Furniturewala, and it turns out that the registered office address of Shalimar Textiles and Hanjer Biotech is the same. The address of another supplier, Munshi Trading, is the same as that of Hanjer Fibres, a related entity of Hanjer Biotech.

Preliminary investigation revealed that certain loans availed to run various plants only existed on paper. For example, investigators did not find the company's supposed plants at Bhandeadi in Nagpur, Bidhannagar in Durgapur and Vadva village in Bhavnagar. The plants at Saswad, Pune and Faridabad were found to be in a scrap condition, and those at the villages of Chettychawadi, Salem, Nakrawadi, Rajkot and Agra were not operational.

Hanjer Group director Nadeem Furniturewala has not answered Firstpost's detailed questionnaire yet. PNB has not responded to an email from Firstpost either.

Documents reviewed by Firstpost show that the forensic audit of the Hanjer Group account — conducted by consulting firm BDO India LLP — had noted that 94.13 percent of the total sanctioned term loan was disbursed to these five key suppliers. The audit also found that 12 of the 17 processing units financed by PNB's Mumbai and London branches had been taken over by the concerned municipal corporation, and that machines were either removed after installation or not brought to the processing units at all.

Auditors also suspect that after various incidents of fires at the group's units, insurance claims were settled at very low rates. They believe there could be a possibility of over-valuation of the machinery, and that a majority of the machinery exist only on paper.

RBI raised red flags a decade ago

On 9 March, 2010, the Reserve Bank of India (RBI) had written to the PNB chairman, warning him about "heavy transactions" from the Hanjer Biotech account — maintained at the bank's branch in Mumbai's Fort area — to Memon Cooperative Bank allegedly linked to Nazim Furniturewala's brother. The RBI had asked PNB to provide details of safeguards put in place before it sanctioned the loan to Hanjer.

"It had been indicated therein that Imran Furniturewala and his brother Irfan Furniturewala, brothers of Nadeem Furniturewala, who is the promoter and director of M/S Hanjer Biotech Energies Private Limited, availing credit facilities of Rs 84.57 crore from PNB. It has now been reported to us that M/S Hanjer Biotech Energies maintains two current accounts with Memon Cooperative Bank Limited at its Bandra (Mumbai) and Surat branches, and heavy transactions have been put through these accounts. We request you to please let us know whether due safeguards were undertaken by PNB at the time of sanction of the credit facilities to M/S Hanjer Biotech Energies Private Limited, particularly with regard to accounts maintained by it with other banks," read the RBI letter reviewed by Firstpost.

Documents obtained by investigators suggest that RBI had an inkling of the group's wrongdoings sometime in December 2009 when it asked PNB officials to look into the accounts of Hanjer's promoters. The Central bank's letter shows that the regulator had received a complaint regarding certain transactions with Memon Cooperative Bank and wanted to check whether these accounts were in compliance with anti-money laundering guidelines.

"We have received a complaint against Imran Furniturewala (former chairman of Memon Cooperative Bank) and his brother Irfan Furniturewala, who were allegedly using their accounts with PNB's Fort branch to issue cheques to settle the dues of certain fixed deposit-holders of Memon Cooperative Bank Limited, a bank presently functioning under RBI direction," the letter further said, adding that PNB must verify whether the cash transaction reports of these accounts were regularly submitted to the Financial Intelligence Unit.

Investigators said other banks could also face the heat as the company had also availed loans from the State Bank of Patiala, Allahabad Bank, Oriental Bank of Commerce, Corporation Bank and Central Bank of India. In banking lexicon, the public money was criminally misappropriated for unlawful gains while committing offence of criminal breach of trust, fraud and cheating.

Hnajer's first project started in 2005 in Rajkot, Gujarat, which was financed to the tune of Rs 5.5 crore by the Oriental Bank of Commerce. The lender granted the company another loan of Rs 8 crore in 2007 to start a project in Mumbai.