CBI books VMC Systems in Rs 17-bn bank fraud case on complaint from PNB

The CBI has booked Hyderabad-based telecom equipment manufacturer VMC Systems and its promoters in an alleged bank fraud case of Rs 17 billion on the complaint of Punjab National Bank, which is reeling under the $ 2 billion fraud committed by jewellers Nirav Modi and Mehul Choksi.

The Central Bureau of Investigation (CBI) registered an FIR against the company and its promoters--Vuppalapati Hima Bindu, Vuppalapati Venkat Rama Rao and Bhagavatula Venkat Ramanna-- in a case of criminal conspiracy, cheating and forgery, officials said Thursday.

The agency carried out searches at three locations in Hyderabad i.e at the residence and office of the directors, they said.

According to the complaint by the PNB, the company defaulted on repayment of loans worth over Rs 17 billion to a consortium of banks.

It has alleged Rs 5.39 billion as outstanding dues towards itself, while remaining Rs 12.07 billion is pending towards the State Bank of India, Corporation Bank, Andhra Bank and JM Financial Assets Reconstruction Company.
 

The company, a manufacturer of equipment for telecom and power sector, had availed working capital credit facilities on August 12, 2009 to the tune of Rs 10.105 billion, the bank said.

It alleged the company diverted the funds given as loan by the consortium of banks.

It said the company routed Rs 438.3 million through current accounts outside the consortium without permission from the consortium between April 1, 2013 to April 30, 2014.
 

The company had claimed that it could not pay the loan amount because of pending dues from BSNL to which it was a major supplier, but the banks found that the dues of BSNL were only Rs 330.9 milion as against Rs 2.62 billon claimed by the company.

The company had also shown other receivables from ITI Ltd, Neutrino Power Systems and Vee Pee Systems, aggregating Rs 3.52 billion, but when the SBI took up the matter with them, they denied the same.