CBI Files Charge Sheet Against Bank Ex Chairman In Rs 79 Crore Fraud Case

The CBI has filed a charge sheet against former chairman cum managing director Ramnath Pradeep of Corporation Bank and other executives in connection with alleged loss of Rs 79 crore incurred by the bank due to loan default by a company, officials said on Friday.

In its charge sheet filed before the court of ACMM, Esplanade, Mumbai, the probe agency named SN Murthy Shankar, the then chief manager, and AP Shiva Kumar, the then senior manager of Mumbai's Corporation Bank, they said.

The agency had taken over the investigation on the complaint of the bank on June 16, 2017 against Parekh Aluminex Limited, its directors and chartered accountant (CA).

The company and the CA were charge sheeted on December 28, 2020.

"It was alleged that the directors, chartered accountant and others had conspired and availed various credit facilities to the tune of Rs 60 crore (approximately) from e-Corporation Bank (now UBI). They had further allegedly diverted the funds and deployed it in real estate and other non-related business activities by way of loans/advances in different real estate projects," CBI spokesperson RC Joshi said.

He said an alleged loss of Rs 79.04 crore (approx) was caused to the Corporation Bank.

It was alleged that the officials of Corporation Bank conspired with the MD of said private company and allowed disbursement of Rs 59 crore (approx) without confirming Drawing Power from Lead Bank, that is, Indian Overseas Bank, and did not make efforts to become member of the consortium to secure the interest of the bank. "It was also alleged that the officials of Corporation Bank also repeatedly extended the time limit to the said private company for seeking NOC from the Lead Bank inducting Corporation Bank in consortium. They subsequently dispensed with the condition of seeking NOC from the Lead Bank of the consortium," Mr Joshi said.

Giving details of the alleged roles of Pradeep, Shankar and Kumar, the CBI alleged that its probe showed that then CMD, e-Corporation Bank (Pradeep) had allegedly sanctioned working capital limit of Rs 60 crore (approx) to the said private firm on the pretext of refusal by three of the existing banks of consortium to share the enhanced limits, Mr Joshi said.

"It was further alleged that the accused did not ensure seeking confirmation from three banks about the reasons for refusal to take their share in enhancement of limits and sanctioned their share without ascertaining the factual position of financial closure and tie-up status," Mr Joshi said.

The CBI alleged that the sanction of the said credit limit was in contravention of the lending policy of the bank.

"It is also alleged that the accused waived the condition of obtaining NOC from Lead Bank facilitating gain to the private firm and causing loss to the bank. It was further found that the then Chief Manager (Shankar), and the then Senior Manager (Kumar), LCB, Mumbai were allegedly associated in the appraisal of the sanction proposal of said private company, knowing fully that the applicant of the loan was neither a director nor an authorised signatory of borrower company," Mr Joshi said.

It was also found that the accused were allegedly associated in preparing the memorandums for modifications of the sanction terms with regard to said private company and did not verify the actual position of the working capital requirement of private company from the Lead Bank, he said.

The accused did not comply the modified sanction terms and allegedly disbursed the loan without informing the Lead Bank about the sanction.

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