HYDERABAD: The long list of bank frauds being reported from across the country seems to be continuing and this time it’s a Hyderabad based firm that is in the news for all the wrong reasons. The CBI on Thursday registered criminal cases against Totem Infrastructure and its promoter for allegedly duping a consortium of eight banks -- led by the Union Bank of India -- to the tune of Rs1,394 crore after taking loans.
The firm’s promoter director Tottempudi Salalith and his wife and director Tottempudi Kavita have been named in the FIR apart from several bank officials. The complaint was filed by consortium leader UBI that was cheated of `303.84 crore. The accused have been charged with criminal conspiracy, cheating, forgery and usage of forged documents as genuine ones. Hours after the cases were registered, special teams raided the firm’s head office in Banjara Hills and the residences of its promoters. They also reportedly seized some documents.
“Totem Infrastructure was involved in various projects like construction of roads, water works and real estate. Their account became an NPA on June 30, 2012 after the firm defaulted payment of interest amounts,” said a CBI official who added that the offence took place in Hyderabad and Andhra Pradesh.
Officials also claimed the company had diverted funds by opening accounts in other banks that were not a part of this consortium and also by inflating their expenditures and stock prices. The officials also said that the company did not route its proceeds from its business through any of the consortium banks.
“The company failed to adjust the outstanding amounts and thus the loan account became a non-performing asset owing to non payment of overdue amount and interest. It has also transpired that the company opened another account with Axis Bank and started diverting of funds,” added the officials.
The action came after Shaik Mohammed Ali, a senior manager with the Union Bank of India’s Industrial Finance Branch in Hyderabad launched a complaint with the CBI.
Apart from the Union Bank of India, the consortium of lenders include State Bank of India (including erstwhile State Bank of Hyderabad and State Bank of Mysore), Punjab National Bank, Syndicate Bank, Bank of Baroda, IDBI bank, Karnataka Bank (now the exposure is with JM Financial Asset-ARC) and Oriental Bank.
The number of bank fraud cases has been piling up after the Reserve Bank of India (RBI) directed banks to file complaints against erring companies. The latest case comes just a day after the investigating agency filed a case of loan fraud against Kanishk Gold Pvt. Ltd on a complaint by State Bank of India (SBI).
Lenders allege non-cooperation by firm
“The fund diversions has taken place without the knowledge of consortium member of banks. The banks have tried to conduct forensic audit but the company directors have not co-operated to conduct forensic audit. The company directors have also indulged in diverting the funds to Karnataka bank and from Karnataka bank to several banks other than the consortium banks,” read the complaint