The Central Bureau of Investigation (CBI) arrested the chairman of REI Agro Ltd along with a promoter of the company in connection with an alleged bank loan fraud of 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 while promoter Sandip Jhunjhunwala was arrested by CBI in New Delhi.
A case was registered against the private firm and its promoters, directors; other executives and other unknown persons under Sections 120-B r/w 420, 467, 468 & 471 of IPC on a complaint of UCO Bank relating to the allegations of cheating 14 consortium member banks (led by UCO Bank) to the tune of Rs. 3871.71 crore.
It was also alleged that the accused had defrauded 14 public sector banks through diversion of funds, showing high cost of false capital expenditure, suspected investment in related companies, falsely inflating debtors, sale at higher price to related /doubtful parties, fraudulent high sea transactions, non compliance with fund utilization, corporate guarantee without permission of consortium members etc.
More than 150 shell firms were allegedly arranged through a group of brokers against fixed commission, for obtaining false invoices and diversion of bank funds. It was also alleged that some of the suppliers were non-existent and some other firms were having no genuine business with said firm and had routed the funds of said private firm through their accounts.