Infra firm, former CMD booked by CBI in ₹3,847.58 crore bank fraud case; conducted searches at four locations in Mumbai

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  • The CBI booked infra firm, former CMD in over ₹3,800 crore bank fraud case; searches at 4 locations. 
  • CBI searches Mumbai locations after FIR against Unity Infra projects for allegedly defrauding banks of ₹3,847.58 crore. 
  • CBI came into action after a complaint was filed by the State Bank of India, one of the consortium members which alleged that the fraud took place at its commercial branch in Mumbai. 
  • The bank fraud came into force when a forensic audit conducted by BDO India LLP reported irregularities in its audit report. 
  • The report also highlighted unexplained excess pay-outs with intentions to siphon off bank funds and related party transactions to diver borrowed funds. 

The Central Board of Investigation registered an FIR against Unity Infra Projects Ltd on suspicion of ₹3,847.58 crore fraud case. It also conducted searches at four locations in Mumbai and booked then CMD Kishore Krishnarao Avarsekar in the case, officials said.

CBI came into action after a complaint was filed by the State Bank of India, one of the consortium members which alleged that the fraud took place at its commercial branch in Mumbai. The SBI accused the company officials of siphoning the “Bank’s funds by doing fictitious transactions, manipulated and fudged books of accounts with an objective to defraud and cheat the bank and to gain unlawfully at the cost of the Bank’s funds”.

The officials said searches were conducted recently at the premises of the accused. As per the information, Unity Infra projects Ltd.’s account had become a non-performing asset on June 24, 2014. Till then, the bank had taken over ₹3,800 crore from 23 lenders against moveable and non-moveable assets besides personal and corporate guarantees. The bank account holder was declared a fraud after five years when a forensic audit pointed towards irregularities.

The bank fraud came into force when a forensic audit conducted by BDO India LLP reported irregularities in its audit report submitted on September 25, 2019.

The report highlighted fictitious transactions, improper adjustment entries passed to accommodate fictitious accounting entries to defraud the bank by fudging the data, and diversion of funds through non-consortium accounts, among others. The report also highlighted unexplained excess pay-outs with intentions to siphon off bank funds and related party transactions to divert borrowed funds.

The CBI has registered an FIR against the company, its former chairman, and former directors and executives under IPC sections of criminal conspiracy (120B), cheating (420), and provisions of the Prevention of Corruption Act.

(With inputs from agencies)

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