Diamond merchant Nirav Modi allegedly deaulted on loans upto Rs 11,400 crore taken from the PNB. Diamond merchant Nirav Modi allegedly deaulted on loans upto Rs 11,400 crore taken from the PNB.

Wary of scrutiny in the wake of the Rs 11,400 crore financial fraud by Nirav Modi and the case against Rotomac Global for defrauding Rs 3,695 crore, banks are rushing to the Central Bureau of Investigation (CBI) against more businessmen for defaulting on loans. Over the last few days, the CBI has received two new complaints, including a second case in Punjab National Bank (PNB), that involve either loans that turned into non-performing assets (NPA) or fraud that was committed several years ago.

After PNB and Bank of Baroda (BoB) filed cases against Nirav Modi and Rotomac Global, CBI has registered two more cases of loan frauds involving Oriental Bank of Commerce (OBC) and Bank of Maharashtra (BoM) in the past three days.

OBC has alleged that it was defrauded of Rs 390 crore by Delhi-jeweller Dwarka Das Seth International and its owner Sabhya Seth. The loans turned NPA way back in 2014, but OBC approached CBI only on August 16 last year after the company had folded up and Seth had fled the country.

The CBI registered an FIR on Thursday and has begun tracing India-based directors and partners of the company.

Similarly, Bank of Maharashtra has approached CBI to lodge a loan default complaint against a Delhi businessman. The loan had turned into an NPA in 2013 and the bank has even sold a property kept as collateral to recover its dues, sources said.

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PNB also approached the CBI for the second time Wednesday against one of its branch managers. According to the complaint, the branch manager had defrauded the bank of over Rs 2 crore in 2011 and PNB had even suspended the official following an internal inquiry.

The OBC complaint has alleged that Dwarka Das Seth International took loans by way of letters of credit and other such credit facilities for gold jewellery export/import between 2007 and 2012 but failed to pay back and the loans turned NPA in 2014.

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A probe by the bank found that the company had indulged in round-tripping of funds through fictitious companies abroad and had utilised funds through discounting bills issued under letters of credit of foreign banks which were either non-existent or had negative ratings.

“We feel that Shri Sabhya Seth of M/S Dwarka Das Seth International Pvt Ltd had orchestrated an elaborate plan to dupe the bank,” OBC said in its complaint`

BoM’s FIR names Amit Singla, the proprietor of Delhi-based Ashirwad Chain Co., loan guarantor Roshan Lal Bhalotia, property valuation firm Tech Mach International and unknown officials of BoM.

It is alleged that Singla and his company took loans of Rs 9.5 crore through cash credit facility from the bank between 2010 and 2012. The accused allegedly put three properties in Delhi and Haryana as collateral. The properties, at the time of taking the loan, were valued at over Rs 18 crore by Tech Mach International.

But after the loans turned into NPAs, the actual market value of the properties were found to be only Rs 2.5 crore. One of the properties, a double-storied house owned by Roshan Lal in Rohtak, Haryana, was valued at Rs 4.85 crore while sanctioning the loan. When the bank sold it off to recover its dues, it fetched only Rs 73 lakh. Similarly, a commercial property owned by the accused at Chandni Chowk in New Delhi was valued by Tech Mach at the time of disbursal of the loans at Rs 4.95 crore, which was actually worth only Rs 31 lakh.

Tech Mach was later removed from the panel of valuers by the bank. In its complaint BoM said, “The overvalued valuations were deliberately given in connivance with the borrowers and the guarantors… to fraudulently induce the bank to finance the borrower.”

The FIR also alleged that Singla had submitted inflated stock audit reports and balance sheets apart from diverting the loans to sister concerns. Four days after PNB complained of being defrauded of Rs 11,400 crore by Nirav Modi, Bank of Baroda (BoB), which had granted loans of Rs 3,695 crore to Rotomac with six other banks and was negotiating with the company for its return, had lodged a complaint with CBI.

BoB even requested the agency confiscate Rotomac owner Vikram Thakur’s passport to prevent him from leaving the country. BoB’s loan had turned NPA two years ago and it had even conducted a thorough investigations into the use of the loans by Rotomac but never chose to approach the agencies in that period.

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