Rs 1,100-Cr Loan Fraud: ACB Files Charge Sheet Against 31 Persons

Jammu- Jammu and Kashmir’s Anti-Corruption Bureau (ACB) on Tuesday filed a charge sheet against 31 people including the managing director of an agro company and a J&K Bank official in a Rs 1,100-crore loan fraud.

The charge sheet against REI Agro Limited MD Sandip Jhunjhunwala, head of J&K Bank’s Mahim branch Mohd Yousaf Bhat and 29 other accused was filed in the court of special judge (anti-corruption), Jammu, an ACB spokesperson said.

The case was registered under the Prevention of Corruption Act and the Ranbir Penal Code in 2019 in connection with the sanctioning and disbursing of crop loans worth Rs 400 crore, a term loan of Rs 150 crore from J&K Bank’s Mahim branch and bill discounting facilities to the tune of Rs 115 crore from the bank’s Vasant Vihar branch in favour of REI Agro Limited without tangible securities, he said.

The investigation revealed that the company, which purchases and processes basmati rice, availed crop loans from banks and credited the amount to the accounts of farmers/JLG (joint liability groups), the spokesperson said.

The company, with the malafide intention to cheat the bank, hatched a conspiracy with its officers and some private persons claiming to represent JLGs. They created fictitious lists of farmers and got the loan funds credited directly in the accounts of these JLGs. The JLGs later diverted the funds back to REI Agro Ltd, he said.

Crop loans to the tune of Rs 400 crore were availed by the company through JLGs in the names of farmers and the amount was misappropriated by it and the JLGs in connivance with bank officials, he added.

The spokesperson said the investigation further revealed that while disbursing crop loans, Bhat failed to ensure that the loan proceeds were disbursed to individual farmers as prescribed in the sanction conditions.

Moreover, the loans were disbursed in violation of the disbursement conditions. As a result of this, the bank suffered a huge loss, he said, adding that the accounts of REI Agro Limited have been classified as non-performing assets (NPA) by the bank.

Besides, the company availed bill discounting facilities to the tune of Rs 115 crore from the bank’s Vasant Vihar branch in 2013.

Under this facility, J&K Bank discounted bills of identified suppliers of REI Agro Limited and the bills could not be realised due to the fraud committed by the company, the spokesperson said.

Further investigation is in progress to identify the remaining JLGs and the involvement of officials from zonal and corporate offices of J&K Bank in Mumbai and Srinagar in granting loan and bill discounting facilities to the company, he said.

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