The CBI has registered a First Information Report (FIR) against the Kolkata-based SPS Steels Rolling Mills Ltd. for allegedly defrauding a consortium of eight banks of over Rs 551 crore.
According to the CBI FIR, the company availed cash credit limit, term loan and line of credit limit amounting to Rs 512 crore from the consortium of banks led by Allahabad Bank, but subsequently revised its audited accounts for financial year 2011-13 "fraudulently and dishonestly".
The subsequent revision of the audited accounts "adversely affected the financial of the company" and the loans became non-performing assets (NPA), it said.
The outstanding debts went up to over Rs 551 crore, it said.
The other members of the consortium are Indian Overseas Bank, UCO Bank, State Bank of Hyderabad, Central Bank of India, UBI, Oriental Bank of Commerce and Corporation Bank, CBI spokesperson RK Gaur said.
The pre-revised audited balance sheets were allegedly submitted by the borrower to induce the banks to sanction enhanced credit limits from existing banks and fresh sanction of loan from newly-inducted banks in the consortium.RK Gaur, Spokesperson, CBI
He said it was further alleged that the company directors fraudulently diverted the funds for repayment of term loan availed from Yes Bank, which was outside the consortium, without any underlying business.
"Some of the letters of credit issued by the member banks of the consortium on behalf of the borrower also devolved. It was also alleged that the directors did not repay the loan and the loan account with Allahabad Bank, leader of the consortium, became NPA on May 31, 2013. The loan accounts with other member banks became NPA on subsequent dates," he said.
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