CBI files case against Rayagada firm for Rs 20 crore bank fraud

BHUBANESWAR: The CBI has registered a cheating case against a Rayagada-based company for allegedly defrauding Andhra Bank (now Union Bank of India) to the tune of Rs 20.69 crore between 2013 and 2015.
Andhra Bank was merged into Union Bank of India on April 1 this year.
The CBI registered the case against Chava Siva Ram Krishna and his wife Chava Neelima, both directors of Tarunshree Cotton Spintex Pvt Ltd, following a complaint lodged by Hemanto Kumar Pradhan, assistant general manager and regional head of Union Bank of India on November 23.
According to the FIR, the alleged loan fraud occurred at the Kasturinagar branch of Andhra Bank in Rayagada between 2013 and 2015.
“The bank had disbursed a term loan of Rs 20.69 crore for civil construction of the company’s factory at Rayagada. But the company allegedly misappropriated the loan and diverted the money to sister concerns, other firms and individuals. Though the term loan was sanctioned for civil construction, the money was misused and misappropriated,” a CBI officer said.
The FIR said unknown public servants did not ensure the borrower’s margin money. The loan amount was released without valuation by an any engineer and without obtaining additional collateral security.
“The alleged criminal acts caused wrongful loss to Andhra Bank (now Union Bank of India) to the tune of Rs 20.69 crore (excluding applicable interest) as on July 22, 2015. While the company and its two directors have been named in the FIR, we are also examining the possible complicity of some unknown public servants, including bank officials, in the fraud,” the FIR said.
In the complaint, the bank attributed the delay in approaching the CBI to the time taken in procuring relevant information and material from various sources. The bank has informed the CBI about suspected nexus of a former branch manager with the accused.
“The company defrauded the bank of Rs 20.69 crore. The company’s unit construction was not yet completed for which the term loan was disbursed. No machinery was installed. No work is currently in progress. The disbursed limits were diverted and the branch had not ensured the end use of the funds. Primary security was not created as per the loan sanction terms,” the bank’s complaint read.