CBI registers case for over Rs 436 crore bank fraud

CBI today carried out searches at nine places after registering a case against a Gujarat-based company for allegedly cheating Central Bank of India of over Rs 436 crore.
CBI sources said the agency registered a case against Electrotherm (India) Limited, besides unknown persons under IPC sections related to criminal conspiracy and cheating and provisions of Prevention of Corruption Act on the basis a complaint received from the bank.
They said the FIR alleged that Directors of Eletrotherm and other unknown public servants of the Bank entered into criminal conspiracy and in pursuance of that cheated the Bank to the tune of Rs 436.74 crore.

"It is alleged in the complaint that the company requested for credit to enable them to supply steel and iron to one M/sKamal Alloys Limited in Tanzania. One of the directors of M/s Electrotherm was also the director of the latter company. The company did not submit any proof of delivery of the material and defaulted in the loans taken," the FIR said.
It alleged standby letters of credit opened by the bank to facilitate trade in machinery and coal devolved.
"The bank had to make payments when the company failed to pay the counterparty. It is also alleged that false representations were made by the company to induce the bank to extend credit facilities to the company," CBI alleged.

After registering the case, the agency carried out searches at nine places in Ahmedabad and Kutch.