VSCPL fraud: The company allegedly diverted the sale proceeds without repaying loan (Representational)

The CBI has arrested Chairman and Managing Director of Vindhyavasini Steel Corporation Pvt Ltd (VSCPL) Vijay Rajendra Prasad Gupta from Haridwar in connection with a Rs 106 crore bank fraud case, officials said on Friday.

The case was registered by the Central Bureau of Investigation (CBI) on April 17 last year on a complaint from the State Bank of India (SBI), they said.

It is alleged from 2011 to 2013, VSCPL, represented by Mr Gupta and other directors, entered into a criminal conspiracy with an intent to cheat the SBI in availing loans.

The CBI has alleged that VSCPL sanctioned term loans and CC limit of Rs 36 crore for purchasing land and building plant, besides another limit of Rs 63 crore as working capital from the SBI.

The company allegedly diverted the sale proceeds without repaying the loan.

It is also alleged that the loan sanctioned was diverted to third party instead of paying the supplying thereby causing a wrongful loss to the tune of Rs 106.22 crore to the SBI and corresponding gain to themselves.

The account was classified as non-performing asset on June 15, 2013, the officials said.