The Central Bureau of Investigation (CBI) has booked Madhya Pradesh Chief Minister Kamal Nath's nephew Ratul Puri for committing a Rs. 354 crore bank fraud, officials said yesterday.
The then-executive director of Moser Baer India Limited (MBIL), Ratul was accused alongside four other directors, Managing Director Deepak Puri (Ratul's father), directors Nita Puri (Ratul's mother and Nath's sister), Sanjay Jain and Vineet Sharma.
Directors booked for criminal conspiracy, forgery, corruption, cheating
CBI booked the directors after the Central Bank of India leveled allegations of criminal conspiracy, cheating, forgery, and corruption against the MBIL directors, PTI reported.
The bank claimed since MBIL started facing credit failures in 2009, they have taken credit facilities from different banks worth about Rs. 1,962cr.
In 2012, Ratul resigned as ED at MBIL, which manufactures CDs, DVDs, and other storage devices.
CBI conducted searches through six NCR offices, residences
Yesterday, the CBI conducted a search at the office of M/s Moser Baer India Ltd at Okhla Industrial Area in South Delhi and the Puris residence in New Friends Colony. Additionally, the CBI conducted searches across four other locations in NCR.
Company gave Rs. 2,052cr guarantee to subsidiaries without bank's sanction
Reportedly, till November 2011, the bank extended credit facilities to the tune of over Rs. 332cr to MBIL.
It claimed that the company made substantial investments of Rs. 1,456cr in subsidiaries. However, instead of recovering its investments, MBIL allegedly chose to write-off.
Furthermore, MBIL also gave a corporate guarantee of Rs. 2,051.87cr on behalf of its subsidiaries without a sanction from the bank.
Central Bank estimates its unlawful losses at Rs. 354.51 crore
Additionally, the bank's complaint stated that Moser Baer had "caused unlawful loss to our bank to the tune of Rs 354.51 crore as on November 29, 2014, and interest thereon by getting unlawful gains."
Company exposed subsidiaries to potential financial loss: Complaint
Notably, a forensic audit was conducted and its report, cited in the bank's complaint, read, "This act of giving guarantees beyond the net worth, that too in disputed waters, without seeking permission from the complainant bank clearly points towards the intention of the accused to lure the lenders fraudulently into lending to its subsidiaries and thereby exposed them to potential financial loss."
"MBIL has committed fraud and cheated the complainant bank"
The complaint filed by the bank last Friday added, "The MBIL has committed fraud and cheated the complainant bank thereby making a wrongful gain to themselves and a wrongful loss to the lender bank, which is a custodian of public money."
Moser Baer, directors, misused bank funds for personal use
Alleging that Moser Baer and its directors "misused and misappropriated" funds granted by banks for personal use, the bank said the company also committed forgery, and fabricated documents in respect of reporting book-debts, inducing the bank to release funds.
Additionally, the bank claimed that the primary securities- comprising stocks of finished/semi-finished goods and raw material- was "dishonestly" removed to prevent distribution among creditor banks.