The Central Bureau of Investigation has filed a chargesheet against industrialist A C Muthiah for allegedly causing a loss of Rs 1.02 billion to Syndicate Bank. The chargesheet follows a case filed by the agency against him and several others in 2016.
CBI officials said apart from Muthiah, the then chairman of First Leasing Company of India Ltd, Farouk M Irani, its former Managing Director and 23 others were also named in the chargesheet filed in the Court of Additional Chief Metropolitan Magistrate, Chennai.
Muthiah and Irani were not available for comment immediately.
First Leasing had been banking with Syndicate Bank, Corporate Finance Branch, Chennai since 2004.
The company had allegedly maintained its accounting database in 'Oracle', which allowed it to alter/manipulate the data in the back-end. The company was also accused of inflating its income and assets since 1998 with fictitious entries.
Most of the loans shown as granted by First Leasing to its clients were allegedly fictitious. Loans availed from the banks were said to have been diverted to shell companies controlled by Irani to acquire shares of First Leasing itself. The company's NPAs were also allegedly shown to be taken over by these shell companies through bogus agreements to avoid NPA provisions and overstate profits, thereby causing loss of about Rs 1.02 billion to Syndicate Bank.
CBI said investigations revealed that the accused along with 7 satellite/ shell companies, in conspiracy with statutory and internal auditors, had allegedly cheated the bank by submitting forged financial statements to enhance credit limits. The excess funding arising therefrom was siphoned off.
The investigations have also disclosed that the promoter-directors had allegedly misappropriated the assets of the company entrusted to them by using such loaned money to donate annually to a Trust run by the people who were charged, CBI said.