The Central Bureau of Investigation (CBI) logo at CBI head quarters, in New Delhi.
| Photo Credit: PTI
According to the bank, the fraud was detected during an inquiry from 2008 to 2014
The CBI has registered a case against Chennai-based Thangam Steels Limited, its managing director and directors for allegedly causing a loss of ₹88.27 crore to State Bank of India. The credit facility account had been declared non-performing asset (NPA) in May 2013.
Among those named are the company managing director P.S. Krishnamurthy and directors, P.K. Vadiambal and P.K. Srinivasan.
The bank lodged a complaint with the CBI on June 25, seeking action against the borrowing company and the others who had stood guarantee. The company availed itself of fund-based credit facilities to the tune of ₹109 crore. The accused misappropriated the funds by submitting forged papers, thereby cheating the lender.
According to the bank, the fraud was detected during an inquiry covering a period of five years, from 2008 to 2014. The report was submitted to the bank in March 2019, based on which the credit facility account was declared a fraud in August 2019.
The company is in the manufacturing of ingots. It was acquired by Chennai-based PSK group in January 2007, said the FIR. Thangam Steels Limited also traded in steel products of reputed manufacturers. Due to the continued irregularity in repayments, the account turned NPA with an outstanding of Rs.93.31 crore. Some amount was later recovered.
The inquiry report flagged inter-group transactions of both purchases and sales, which were allegedly being done for the last several years to show a higher turnover to justify the credit facilities availed.
It is alleged that stock valuation was also not in accordance with the bank’s guidelines and balance sheets were forged. Without informing the lender, the company maintained an account with another bank, through which over ₹116 crore was routed from 2009 to 2013, which indicated to alleged diversion of funds.
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