CBI Books Starch Manufacturer for Rs 56.21 Crore SBI Fraud in Mumbai
The Central Bureau of Investigation has registered a fraud case against a private starch manufacturing company, its directors, and unknown public servants for allegedly defrauding the State Bank of India of Rs 56.21 crore in Mumbai.
The central agency initiated action following a written complaint submitted by Jyoti Kumar, Deputy General Manager and Branch Head at the State Bank of India in Mumbai. The complaint was lodged against the borrower company, which operates offices in both Mumbai and Ahmedabad, its promoters, directors, unknown public servants, and unknown others. The firm is engaged in manufacturing starch and derivative products.
According to the First Information Report, the case covers offences including criminal conspiracy, cheating, forgery, dishonest misappropriation of property, criminal breach of trust, falsification of accounts, and criminal misconduct. These alleged actions resulted in an unlawful and wrongful financial loss of Rs 56.21 crore to the complainant bank and a corresponding wrongful gain to the accused persons and entities.
The CBI stated in its FIR that the fraud occurred in connection with credit facilities availed by the borrower company from the State Bank of India. The accused persons, operating through the borrowing entity and in conspiracy with each other and unknown others, obtained the credit facilities by misrepresentation, deception, and inducement. They then misappropriated the funds by entering into transactions with dishonest intentions to cheat the bank and gain unlawfully.
The FIR detailed that the borrower firm, in connivance with its promoters, directors, related parties, and group companies, indulged in a systematic pattern of fraudulent financial transactions. The accused allegedly engaged in the manipulation of books of accounts, the diversion and siphoning of bank funds, the creation of fictitious receivables balances, and the misappropriation of company inventories.
The complaint also revealed that the accused entities engaged in the suppression of related-party disclosures and the shifting of profits among group entities. Furthermore, the company submitted false stock statements to SBI, thereby misleading the lending institution and directly violating the terms and conditions under which the credit facilities had been sanctioned.
The fraudulent activities perpetrated by the accused came to light when a forensic auditor submitted a report in September 2023. That audit report covered the period from April 2015 to November 2019, examining transactions where the accused dishonestly misappropriated the bank's sanctioned funds and caused wrongful financial loss to the institution.
