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LONDON: The UK subsidiary of Punjab National Bank ( PNB ) is suing five Indians, one American and three companies in the UK high court claiming they fraudulently misled the bank to lend them tens of millions of dollars and now owe the bank approximately $37 million (Rs 271 crore) in unpaid loans.

PNB (International) Ltd, which has seven branches in the UK, whose parent bank is PNB, is suing the individuals and companies for “fraudulent misrepresentation in respect of numerous loans” and “breach of contract”, according to its claim lodged with the high court. The loans were advanced, the bank states in its claim, to “assist the financing of the construction of a lube oil re-refining unit in South Carolina and the development and sale of wind energy projects.”

The bank claims false and exaggerated projections and balance sheets and false representations about the status of projects were made to obtain the loans. “The claimants’ money was siphoned off by directors and guarantors of the borrowers” in a “scheme that was fraudulent from the outset”, the bank states.

PNB states that it advanced the money in dollars from London between 2011 and 2014 to four companies registered in the US — all operating in the renewable energy sector — namely South Eastern Petroleum LLC (SEPL), Pesco Beam USA, Trishe Wind and Trishe Resources.

SEPL, which operates oil recycling plants in the US, defaulted on loans worth $17m, ($10m of which was lent by PNB and $7m by Bank of Baroda) and the bank states it believes “SEPL could now be impecunious” as it is in liquidation.

Pesco Beam Environmental Solutions, which specialises in engineered and manufactured systems for use in oil re-refining, and has a factory in Sriperumbudur, Chennai and a US subsidiary in Virginia in the USA, is the 100%-beneficial owner of SEPL. Pesco USA has itself defaulted on loans worth $13m, PNB states its claim, which is suing both Pesco Beam USA and Pesco Beam India.

A Subramaniam, managing director of Pesco Beam and his brother Anantharam Shankar, its executive director, both of whom reside in Chennai and Luke Staengl, the CEO of the US subsidiary are being sued.

PNB is also suing Trishe Resources, a wind energy company in the US. In 2014 Trishe Wind in the US was declared insolvent and its total assets and liabilities transferred to Trishe Resources.

PNB alleges Trishe Wind has defaulted on loans worth $10 million whilst Trishe Resources owes the bank $3 million.

The owners of Trishe Resources in the US are also being sued - namely Vathsala Ranganathan, Ramkhumar Narasimhan and Ravi Srinivasan, all of whom live in Chennai.

The bank claims they fraudulently misrepresented that Indian conglomerate the Shriram Group was backing their projects.

“The claimant would not have advanced such large sums of money to the defendants had it been informed that these individuals were operating on their own and had no connection with or prospective financial backing from Shriram Group,” the bank states in its claim. “The defendants acted jointly and in concert in making the fraudulent misrepresentations and all the defendants are interconnected and all have benefited from the claim that Shriram Group was financially supporting SEPL and Trishe Wind.”

The nine defendants are all contesting the jurisdiction in the English courts and have made an application for the claim to be struck off. A judgment on that is reserved.

Pavani Reddy, managing partner, Zaiwalla & Co, which is representing eight of the defendants, told TOI: “The fraud claims are fantasy and the court is still determining the jurisdiction. Our clients have a valid defence which they will pursue in the proper jurisdiction.”

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