The CBI recently searched the premises of Ratnakar Gutte and other accused.
The CBI has filed an FIR against Maharashtra MLA and sugar baron Ratnakar Gutte and Gangakhed Sugar and Energy Limited for an alleged bank fraud of Rs 409.26 crore, officials said on Friday.
Besides the company and Mr Gutte, who won the Gangakhed seat as a Rashtriya Samaj Paksha candidate in the 2019 Maharashtra assembly elections, the agency has booked his sons and other family members, they said.
According to the Central Bureau of Investigation, Mr Gutte is one of the directors of Gangakhed Sugar and Energy Limited.
It is alleged that Gangakhed Sugar and Energy Limited had availed various credit facilities to the tune of Rs 577.16 crore in the form of a term loan, working capital facility and other credit facilities from a consortium of banks led by UCO Bank between 2008 and 2015, the officials said.
The CBI recently searched the premises of Mr Gutte and other accused at two places in Nagpur and three in Parbani, they said.
Mr Gutte's sons and other family members have also been booked by the agency on charges of criminal conspiracy and cheating under the Indian Penal Code, and under provisions of the Prevention of Corruption Act.
The Enforcement Directorate had filed a charge sheet against Mr Gutte and Gangakhed Sugar and Energy Limited for alleged money laundering in December last year.
The bank has alleged in a complaint, now part of the CBI FIR, that the company has potentially diverted loan funds and availed excess drawing power in working capital by overstating net current assets in a stock statement.
This resulted in a cash crunch for the company, caused a loss to the business and ultimately resulted in non-payment of dues to banks, making the account a non-performing asset.
The company opened a Letter of Credit (LC) from UCO Bank and Union Bank of India in favour of suppliers for trading in sugar from 2013-14 to 2016-17, amounting to Rs 197.17 crore, the bank alleged.
Goods under LCs were rejected and shown in books as purchase returns valued at Rs 143.87 crore, it claimed.
"It appears that these transactions were not in the nature of normal business transactions for the purchase of sugar in trading and were used for availing finance from the Banking system by inappropriate use of LCs," the bank alleged.
The bank also red-flagged several instances of financial irregularities against the company.
"It is evident... that the intention of the company and its promoters/directors was malafide. They took advantage of the banking system and misutilised various credit facilities provided by banks," it alleged.
The company allegedly jeopardised banks' interest, and the loans were utilised for other than sanctioned purposes, it alleged.
"The company has defrauded and swindled public funds along with diversion of funds...," it alleged.
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