Bank fraud: I-T dept conducts searches on Vadodara firm

The Income Tax department today conducted searches at various premises of Vadodara-based company Diamond Power Infrastructure Ltd (DPIL) and its promoters, who are accused of cheating various banks to the tune of Rs 2,654 crore.

The searches were being carried out at 17 different places in and around Vadodara city, including at the corporate office of DPIL in Vadodara city, a senior Income Tax (I-T) officer said.

DPIL and its promoters are already on the radar of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) for allegedly cheating various banks.

"Taking a lead from these central agencies, that had conducted multiple searches recently, the Income Tax department also conducted searches at 17 different locations of the company and its promoters today," an official said on the condition of anonymity.

"The searches are still on at the residential premises, offices and factories of DPIL," he said.

DPIL, which manufactures electric cables and equipment, is promoted by S N Bhatnagar and his sons Amit Bhatnagar and Sumit Bhatnagar, who were also the executives of the firm.

"Our main aim is to see whether the company has maintained its accounts or not and whether there was any evasion of tax by way of financial irregularities," the official said.

Yesterday, the ED had conducted multiple searches in connection with a money laundering case against DPIL for allegedly cheating various banks to the tune of Rs 2,654 crore.

The CBI had conducted searches in the case last week.

It is alleged that DPIL, through its management, had fraudulently availed credit facilities from a consortium of 11 banks (both public and private) since 2008, leaving behind an outstanding debit of Rs 2,654.40 crore as on June 29, 2016, the CBI said.

The loan amount of Rs 2,654 crore, it said, was declared a non-performing asset in 2016-17.

According to the CBI, the company had been allegedly submitting false stock statements to the lead bank by treating receivables more than 180 days (non-current asset) as less than 180 days (current asset) to get more drawing power in their cash credit accounts.

The CBI alleged that DPIL extensively utilised cash credit limits for obtaining a large number of letters of credits, and many of them could not be honoured by the company and were thus "forced charged" on the credit limit.

The Bank of India's exposure to the company is Rs 670.51 crore, the Bank of Baroda's exposure is Rs 348.99 crore and that of the ICICI Bank is Rs 279.46 crore, the CBI FIR said.