ACB registers FIR in Jammu and Kashmir Bank loan fraud case of Rs. 1100 crore advanced to M/s REI (Rice Exports India)Agro Ltd: Searches conducted at many locations in Delhi, Jammu and Srinagar
ACB registered Preliminary Enquiry (PE) into allegations "that the officers/officials of J&K Bank Branch Mahim Mumbai and Ansal Plaza, New Delhi have sanctioned loan to the tune of Rs. 800 crore in favor of firm namely M/S REI Agro Ltd, on fake documents and in violation of the laid down banking procedure during the year 2011 to 2013 which resulted in the accounts becoming NPA in the year 2014 thereby causing a huge financial loss to the bank".
It emerged during PE that the Firm REI Agro, which has shown its Head Office at Kolkata and Corporate office at New Delhi, approached Mahim Mumbai Branch of JK Bank without having any office at Mumbai and got the loans/advances sanctioned in their favour worth Rs.550 crores. The VasantVihar Branch of J&K bank also sanctioned Rs139 croresin their favouragainst Supplier Bill Discounting Facility and takeovers.
The company approached the J&K Bank branch Mahim Mumbai and VasantVihar Delhi for sanctioning of above mentioned advances for making payment to the farmers as per terms and conditions laid down in loan sanction order of J&K bank.The farmers were supposed to provide paddy to the company,in turn the company had to sell the produce(paddy) and the remittancethereof had to be deposited in the bank as installments against advances received by the company.
Despite the fact that it was known to the bank authorities and the company that the loan amount had to be disbursed among farmers for production of paddy which was brazenly violated by the company in connivance by the bank authority who allowed disbursement of loan through Joint Liability Groupd (JLG’s) though the company had already received the paddy and were not entitled to disburse the loan under such circumstance. As per probe conducted during PE, the JLG’s were in fact non existing entity whose credentials and antecedents had never been verified by the bank. The objective was to facilitate the company to divert the loan amount for its own benefit. The bank also violated NABARD guidelines where members of JLG’s (which is a group of farmers) should be from the same area/village, but this aspect was deliberately and with malafide intentions ignored by the bank officers. The crop loaninfact had been recommended against the securities of hypothecation of receivables of farmers/JLGs for supply of paddy to M/S REI Agro and corporate guarantee of the company along with postdated cheques (PDCs), which cannot be construed as a tangible security.
Further the bank officers/officials have also failed to take cognizance of the disbursement requests of the company wherein the company itself mentions that it had already received the produce from the farmers/JLGs thus making the loan unwarranted. On scrutiny of bank records,there is nothing on record as to who drafted the loan documents and even there is no vetting certificate of concerned law department.
As per records of the bank, theVasantVihar Branchhad in fact taken over loan obtained by the company from IDFC &IREDA . This loan was taken over for the wind mill already established by the company. This account too turned NPA along with other accounts. The Machines were sold by the Bank and Rs 54crores were recovered from the company but there is still outstanding of Rs 85 crores.
These loans/advances were sanctioned/ disbursed by the officers/ officials of JK Bank Branch Mahim, Mumbai and VasantVihar, New Delhiin connivance with and under patronage of then ChairmanJ&k Bank ShriMushtaq Ahmad Sheikh under single conspiracy spread over several years, in a planned and pre designed manner by misuse and abuse of their authority as public servants of the bank, just to serve the interest of the promoters of company M/S REI Agro Ltd. Namely Sanjay Jhunjhunwala, Chairman of Company M/s REI Agro Ltd. SandeepJhunjhunwala Vice President and Managing Director of the Companywho have by misuse and abuse of their authorities as public servants of the bank conferred huge monetary benefit upon the company dishonestly and fraudulently, which resultantly inflicting huge loss of Rs.550+85=635crores plus Rs. 489.45 crores (Interest component), total Rs. 635+489.45=1124.45 crores to the J&K bank which ultimately is loss to state exchequer.
8. The omissions and commissions which have surfaced during PE clearly disclosed commission of offences U/S 5 (1) (d) r/w 5 (2) J&K PC Act Svt. 2006 & Sec. 467, 468, 471 & 120-B RPC on the part of the bank officers/officialsnamely Mushtaq Ahmad Sheikh, then Chairman J&K Bank,Imtiaz Ahmed Bhat then Branch Head VasantVihar, DalipBhan Credit Officer, Branch VasantVihar, Ashok Kumar Credit Officer, Branch VasantVihar, Harsh Kumar Manager Advances, Branch VasantVihar, Rakesh Kaw Manager Advances, Branch VasantVihar, Adil Bashir then Branch Head Mahim Mumbai, S.S.Sambyal, Credit officer, Branch Mahim, Mohd. Yousaf then Branch Head Mahim, Abdul Hamid Thokar Credit officer, Branch Mahim, BasirAhmad then Branch Head Mahim, Nisar Ahmed Shah Credit officer, Branch Mahim, Shafiq Ahmed Credit officer, at A&AP (Advances & Asset Planning) Corporate Headquarters, J&K Bank, Srinagar, A.K.KoulRetd. Vice President Branch Head VasantViharand the beneficiaries (as conspirators) namely Sanjay Jhunjhunwala, Chairman of Company M/s REI Agro Ltd. SandeepJhunjhunwala Vice President and Managing Director of the Company, Danish Beig, Vice President Corporate Finance REI Agro, Rahul Singhania, Manager Corporate Finance M/s REI Agro, JLGs and others.
Soon after the registration of FIR, ACB teams carried out extensive searches at the houses of aforesaid accused J&K Bank Officials at nine (09) locations in Kashmir Valley, four (04) locations in Jammu and three (03) locations in National Capital region of Delhi including the houses of Sanjay Jhunjhunwala, Chairman of Company M/S REI Agro Ltd and Sandeep Jhunjhunwala Vice President and Managing Director of the Company.
Further investigation in the matter is underway and three (03) teams are continuing the investigation/searches in National Capital Region, Delhi.