Canara Bank alleges Rs 5 bn fraud by Kolkata-based R P Infosystems

The bank has made a complaint to the CBI

Canara Bank, after authorisation by a consortium of lenders, has made a complaint to the Central Bureau of Investigation (CBI) against a Kolkata-based computer assembler-integrator, R P Infosystems, alleging a Rs 5.15 billion fraud.

D V Prasad Rao, deputy general manager of the Kolkata circle of Canara Bank, alleged in the complaint R P Infosystems “failed and neglected to pay dues” to the lenders, despite repeated remainders. The company had manipulated its financial statements, and routed sale proceeds via the loan account, allegedly siphoning off the loan amount.

Canara Bank said in a statement, “Under a consortium arrangement of 17 banks, Canara Bank financed working capital limit of Rs 400 million (4.69 per cent of the loan). We were not the leader of the consortium. The leader bank has already filed a case with the CBI in 2015. The account has already been treated as fraud by our bank in October 2015 and reported to the Reserve Bank of India (RBI). Consequent, upon the leader bank relinquishing its role as the leader of the consortium, and as directed by the CBI, Kolkata, we were authorised by the remaining member banks to file a revised complaint with the CBI, which we have filed on 26.2.2018.”

Joint inspection by the lenders was conducted in February 2013. The case was reported to the Reserve Bank of India (RBI). A Fraud Angle Investigation report on March 10, 2016, concluded the company had inflated its receivables. While the computer assembler claimed to have dealings with GAIL India, Vincent Electronics, CEAT and others, these companies denied any dealings with R P Infosystems.

The complaint has named current director of R P Infosystems, Kaustav Ray, former directors Shibaji Panja and Vinay Bafna, and former vice-president Debnath Pal. “The role of an unknown public servant may also be examined during investigation,” the complaint read.

Ray told Business Standard the complaint pertained to 2012-13, when loans were raised to fund expansion. Then, IDBI Bank had filed a complaint with the CBI for non-payment of dues. The CBI had charge-sheeted the company. Subsequently, a court ordered the firm to pay the dues. “We have started repaying the money and any outstanding will also be cleared,” Ray added.

Panja, who left the firm four years ago after a spat with Ray, told this publication that at the time of his resignation, the company’s bank accounts were “in good shape”. “But loans can get bad. One needs to understand that the bank’s interest rate is 14 per cent and our margin in this trade is 5-7 per cent. What one earns is lower than what one has to repay the banks.” He claimed he was ready to co-operate with the law-enforcers but hadn’t received any communication from CBI or other agencies.

Once Rs 5.2-billion strong, R P Infosystems was founded by Ray and Panja in 1999. It made the Chirag brand of computers and once had Indian cricket captain Sourav Ganguly as brand ambassador. Chirag became a hit and went on to strike deals with hardware manufacturers for sourcing and assembling of desktops. While Panja was responsible for sales and promotional activities, Ray was in charge of finance. However, as the business grew, the partnership gradually soured. In 2013, Panja sold his 49 per cent stake to Ray. The former director said Ray alone runs R P Infosystems.

Panja had accompanied West Bengal Chief Minister Mamata Banerjee as a non-official delegate during a trip to Bangladesh. In February 2015, he was arrested in the IDBI Bank case as soon as he returned to Kolkata airport. He was grilled by law-enforcing agencies. Banerjee had then distanced herself from Panja.
 

“Now, I am no longer associated with any political party or circle. It’s not my cup of tea,” he claimed. Panja now owns a television production company in Kolkata.