New Delhi: Over two years after a rice businessman, Manjit Singh Makhni, fled the country, the Central Bureau of Investigation (CBI) has now booked him for allegedly defrauding a consortium of six banks led by Canara Bank to the tune of around Rs 352 crore.
The director of Punjab Basmati Rice Ltd Makhni had left India in the beginning of 2018. His passport was revoked in September 2018. The agency’s FIR said Makhni is now living in Canada.
According to the FIR, the CBI received a written complaint on 1 June from the general manager of Canara Bank, Chandigarh, against Punjab Basmati Rice Ltd and its directors Manjit Singh Makhni, his son Kulwinder Singh Makhni, his daughter-in-law Jasmeet Kaur and unknown public servants for allegedly cheating six banks. All of them had left along with Manjit.
This complaint came over a year after the Reserve Bank of India (RBI) suggested the consortium of banks file a complaint with the central agency.
In its complaint, Canara Bank alleged that the accused disposed of the rice stock, the prime security with the bank, without prior intimation or approval thereby causing it a wrongful loss to the tune of Rs 174.89 crore. Other banks in the consortium saw separate losses.
“The forensic audits disclosed the fraudulent diversion of funds and serious irregularities in the operation of the company,” said the FIR.
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Complaint filed a year after RBI suggestion
The company had been dealing with Canara Bank ever since the bank sanctioned credit facilities to it on 12 April 2003. In 2012, it opted for a consortium arrangement. The banks included were Andhra Bank, IDBI, OBC, UBI and UCO Bank. The consortium was led by Canara Bank.
The FIR mentioned how much Punjab Basmati Rice owed to the banks. “Rs 175 crore with Canara Bank, Rs 53 crore Andhra Bank, Rs 44 crore with UBI, Rs 25 crore with OBC, Rs 14 crore with IDBI and Rs 41 crore with UCO Bank,” the FIR said.
It was in March last year, after making its own investigations, that the bank reported the alleged fraud to the RBI. The central bank then suggested that the bank must file a complaint with the CBI. However, it was filed in June this year.
How the alleged fraud was committed
According to the FIR, the company defaulted in the repayment of principal debt and instalments.
A joint inspection for stock verification by the bank in April 2018 noticed that rice stock worth Rs 291 crore, which is part of the security for the credit facility, was removed in a time of just two months, and no invoices were submitted to substantiate the claims of stocks having been sold out.
Further, the consortium of lenders ordered for conduct of forensic audit into the operations of the company, which revealed the serious irregularities, the FIR said.
The company also allegedly maintained a current account with non-lending banks without obtaining no-objection certificates from the lending banks in the consortium and diverted the sale proceeds detrimental to the interests of the bank.
In its complaint, the Canara Bank said that according to their source information, Manjit Singh Makhni had left for Canada long before they filed their complaint.
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