The CBI has arrested Manoj Jayaswal and Abhisekh Jayaswal -- promoters of a major mining company Abhijeet Group -- along with a former DGM of Canara Bank for allegedly causing a loss of Rs 290 crore to two public sector banks.
The CBI said "it is just the tip of the iceberg" as the probe over the last two years found that 13 firms of Abhijeet Group, now known as Pathbreaking Group, have defaulted on loans of over Rs 11,000-15,000 crore from 20 banks and financial institutions which have become non-performing assets since 2014.
The agency found that the funds from the banks were allegedly diverted through 132 shell companies of the group.
Some of the largest non-performing assets on account of group companies of Abhijeet Group are State Bank of India's Rs 2,200 crore and Axis Bank's Rs 1,600 crore, sources said.
Manoj and Abhisekh have been arrested for defaulting on a loan of Rs 290 crore, one of the non-performing assets on account of group company Abhijeet Projects, the CBI said.
They were arrested from Kolkata and a special court there has sent them to an eight-day CBI custody during which investigation officers are planning to not only question them about Rs 290 crore but also about a web of transactions allegedly used to divert the bank loans for purposes other than specified.
The case has its origin in the coal scam as Abhijeet Group had created a special purpose vehicle -- Jas Infrastructure, which is an accused in a CBI case, with sanctioned credit limit of Rs 5,700 crore for setting up a 1,320-megawatt power plant in Banka, Bihar, after the allocation of Mahuagarhi coal block to the group, the CBI sources said.
To set up the plant, Jas Infrastructure started giving contracts. One part of the work -- erection, procurement and construction (EPC) worth Rs 790 crore was given to its group company Abhijeet Projects, the sources said.
For this, Rs 290 crore was loaned from Canara Bank and Vijaya bank.
Abhijeet Projects sublet the work to Simplex Infrastructure Pvt Limited, but the work was never completed, following which both banks filed a complaint with the CBI in 2015.
"Abhijeet Projects allegedly awarded the civil and structural work under the EPC contract to Kolkata-based Simplex and executed a contract, as per which the former was required to pay a mobilisation advance of about Rs 157.9 crore in five instalments and the latter was required to give a bank guarantee to the former," CBI spokesperson R K Gaur said.
Also, they allegedly executed an amendatory agreement (without the knowledge of the banks), as per which Simplex Infrastructure was required to refund the mobilisation advance on demand of Abhijeet Projects.
Gaur said a major portion of the discounting proceeds of line of credits issued by the banks in favour of Simplex were refunded by it to Abhijeet Projects under obligation of the said amendatory agreement.
Abhijeet Projects allegedly diverted the refunded amount for purposes other than for which the loan was sanctioned, he said in a statement.
The agency had in 2015 registered a case against the accused on charges of alleged criminal conspiracy and cheating.
He said the then DGM and Branch Head of Canara Bank's Prime Corporate Branch, Bangalore, T L Pai recommended and forwarded credit proposals to competent authorities of the bank, falsely confirming assignment of bank guarantees worth Rs 157.9 crore given by Simplex Infrastructure in favour of the bank by Abhijeet Projects.
CBI spokesperson R K Gaur said Pai has also been arrested in the fraud case.
Alleged losses to the tune of Rs 218.85 crore to Canara Bank and Rs 71.92 crore to Vijaya Bank were caused, the CBI said.