The CBI has registered an FIR against a Mumbai-based company, PAL Trading, for allegedly siphoning off money loaned from the State Bank of India through 17 shell companies, causing a loss of Rs 24 crore to the bank, officials said Monday. The CBI has booked the company and its directors Rinku Patodia and Anita Patodia on a complaint from the State Bank of India giving details of the modus operandi detected during a forensic audit of the company dealing in fabrics.
The bank had sanctioned credit facilities of Rs 22 crore in 2007 to the company based at Goregaon East which resulted in the outstanding of Rs 24.20 crore on the date of non-performing assets on December 27, 2012. During the forensic audit of the company, it surfaced that the company misappropriated and diverted loan funds to real estate companies of relatives of the Patodias using 17 shell companies.
The term shell company refers to a company without active business operation or significant assets, which in some cases are used for illegal purposes such as tax evasion, money laundering, obscuring ownership, benami properties, etc. The company allegedly opened 28 letters of credit of Rs 25 lakh each from the bank between December 2011 and February 2012, which were devolved by the shell companies, which indicates that misappropriation of funds with dishonest intention was carried out in a "systematic and planned manner", the FIR alleged.
A letter of credit is a guarantee given by a lender bank on behalf of its customer that it will make the payment in case of default. "It has been alleged that the company had opened accounts with other banks, ICICI Bank, through which it had started realizing and routing its sale proceeds (not routing sale proceeds through the cash credit account maintained with complainant bank) while misrepresenting to State Bank of India with dishonest intention that it was facing cash crunch and required overdrawing and made the bank to release further funds in the form of overdrawing," the FIR has alleged. The CBI alleged that systemic diversion of funds and the false representation to the bank that it was facing a cash crunch show dishonest intention on the part of the company and its management.
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