ACB files charge sheet in Rs 1100-crore loan fraud

Srinagar, Jun 29: Anti Corruption Bureau (ACB) on Tuesday said that it has produced a charge sheet against 31 persons in the rice export India scam of Rs 1100 Crore of J&K Bank.
According to a statement, it said that a chargesheet has been filed against Sandip Jhunjhunwala, son of Kailash Chander of W-25/C, Western Avenue, Sainik Farms, New Delhi Managing Director M/s REI Agro Limited, Muhammad Yousaf Bhat the then Branch Head Mahim and other 29 accused persons before the Court of Special Judge Anti Corruption Jammu in 1100 Crore loan Scam.
A case under FIR 24/2019 under section 5(1)(d) r/w 5(2) of J&K P.C Act Svt 2006 and sections 120-B, 467, 468, 471,420 /RPC was registered in ACB Jammu for allegedly sanctioning and disbursing crop loans to the tune of Rs 400 Crores, term loan Rs 150 Crores from J&K Bank Branch Mahim and Bill Discounting facilities to the tune of Rs 115 Crores from J&K Bank Vasant Vihar Branch in favour of M/s REI Agro Limited without tangible securities and in violation of banking norms.
“The investigation conducted has revealed that M/s REI Agro Ltd is a Public Limited company having its registered office at Everest House 46-C, Chowringhee Road, Kolkata (W.B) but later on company shifted its registered office to District Rewari Haryana,” the statement said.
It added that the company M/s REI Agro Limited was a purchaser and processor of basmati paddy in the country and for that purpose it used to avail Crop Loans from Banks and credit the same to the accounts of farmers/JLG groups (Joint Liability Groups) and obtain the paddy/paddy produce from them and after processing the paddy in the mill owned by the company, it was selling rice in the market to repay the loans so obtained.
“A model was devised by J&K Bank where under J&K Bank was to provide Crop Loan to the farmers and the farmers were supposed to provide paddy to the company M/s REI Agro Limited and in turn the company had to sell the produce (paddy) and the remittance thereof had to be deposited in the bank as installments against advances received by the company. In this connection a Tripartite Agreement was executed between J&K Bank, M/s REI Agro Limited and JLGs and an Interse Agreement was executed between farmers and JLGs,” the statement said.
“Investigation has revealed that the company REI Agro Ltd its Chairman and Managing Director had no intention of repaying the loans to the bank. The sole purpose from the very beginning was to swindle the funds obtained. In the instant case Rs. 400 Crores Crop Loans were availed by the company through JLGs in the names of farmers and the same was misappropriated by the JLGs (Joint Liability Groups) and Company in connivance with the officers of J&K Bank Limited,” the statement said.
It added that the company with the malafide intention to cheat the J&K Bank hatched a conspiracy with the Officers of J&K Bank and some private persons representing as JLGs (Joint Liability Groups) created fictitious lists of farmers who were non-existent under each JLG group and got the loan funds credited directly in the accounts of these JLGs who later diverted the funds back to the borrower company M/s REI Agro Ltd without crediting it to any farmers account.
“Investigation conducted has revealed that while disbursing the above mentioned Crop loans sanctioned in favour of farmers/JLGs as suppliers of company the then Branch Head Mahim Muhammad Yousaf Bhat failed to ensure that the loan proceeds were to be disbursed to the individual farmers as prescribed in the sanction conditions and instead the payments were made in the accounts of various JLGs mentioned above thereby defeating the very purpose of the sanction meant for raising crops,” it said.
Moreover, the loans were disbursed in violation of the disbursement conditions as a result of it huge loss has been caused to the Bank. The accounts of the company have been classified as NPA by the Bank, it said.
“Besides this, the company also availed Bill Discounting Facilities to the tune of Rs. 115 Crores from J&K Bank Branch Vasant Vihar in the year 2013. Under this facility J&K Bank has discounted Bills of identified Suppliers of M/s REI Agro Limited and the Bill could not be realized due to the fraud committed by the company with J&K Bank as well with other Banks. There was no genuine business of the company with the suppliers whose bills were submitted by the company for discount,” the statement said.
“During investigation it has been established that the loans have been sanctioned with malafide intention in violation of banking norms in order to confer undue benefit upon the promoters of the company and JLGs. Further investigation is in progress to locate the remaining JLGs and the involvement of the officials of this Zonal Office and Corporate Office of J&K Bank Mumbai & Srinagar in the grand of loan and bill discounting facilities in favor of the borrower which has resulted the accounts becoming NPA and the funds being siphoned out,” the statement added.