(Ed: Encorporating statement of CBI spokesperson) New Delhi, May 4 (PTI) The CBI today arrested the chairman of REI Agro along with a promoter of the company in connection with an alleged bank loan fraud invloving Rs 3,871 crore.
Chairman Sanjay Jhunjhunwala, who was facing a Red Corner Notice issued by the United Arab Emirates, was arrested after he returned from abroad.
The CBI had also issued a Look Out Circular against him.
Promoter Sandip Jhunjhunwala was also arrested by the agency here.
The CBI had registered a case against them and the Kolkata-based REI Agro, which deals with Basmati rice exports, in October 2015.
The action was taken on the complaint from a consortium of 14 banks led by UCO Bank.
It was alleged that the company had defrauded the banks to the extent of Rs 3,871 crore since 2013 through conspiracy, cheating and forgery, CBI spokesperson R K Gaur said.
It is alleged that the company cheated the banks using 150 shell companies, on the basis of fixed commission, through a group of brokers by creating false invoice, documents of money transfers for non-existent transactions, he said.
Jhunjhunwala was also facing a case of misappropriation of AED 160 million for which the UAE authorities had issued a Red Corner Notice against him, he said in a statement.
The agency had registered a case of criminal conspiracy, cheating and forgery against the accused.
The accused had defrauded the banks through fund diversion, showing inflated cost of false expenditure, suspected investment in related companies, falsely inflating debtor, he said.
The CBI has alleged that the company showed sales at higher price to doubtful parties, indulged in fraudulent high sea transactions, non-compliance with fund utilisation, corporate guarantee without permission of consortium members etc, the spokesperson said.
Gaur said some suppliers were allegedly non-existent and some other firms were not having any genuine business with REI Agro and had only routed funds through their accounts.
This is published unedited from the PTI feed.