Bank fraud case: CBI recovers paintings worth Rs 5.50 crore, luxurious watches

New Delhi: The Central Bureau of Investigation (CBI) on Thursday (July 28) conducted further searches in connection with a case related to the alleged loss of Rs. 34,615 crore to a consortium of 17 banks led by Union Bank of India. During the search, a painting by FN Souza (1964) and another by SH Raza (1956) worth Rs 5.50 crore (approx); two watches of Jacob & Co & Frank Muller Geneve make worth Rs 5 crore (approx) and gold and diamond jewellery including bangles & necklace worth Rs 2 crore (approx) have been recovered, the CBI said in a statement. 

It was also alleged that the promoters had acquired expensive items using the diverted funds, the statement added.

During the probe, the former CMD and the former Director of a private company based in Mumbai were arrested and are presently in CBI custody. In the earlier searches conducted at the premises of the accused in various locations in Mumbai, several incriminating documents were seized.

“A case was registered on 20.06.2022 on complaint from Union Bank of India, Industrial Finance Branch, Mumbai against private (Borrower) company based at Mumbai, its then CMD, then Director and others including a private person, private companies, unknown public servant(s) & private persons on the allegations that the accused cheated a consortium of 17 banks led by Union Bank of India to the tune of Rs. 34,615 crore (approx.) by siphoning off loans availed from the said banks & falsifying the books of said private (Borrower) company and creating Shell Companies/false entities, which had come to be known as “Bandra Book Entities”,” the CBI said. 

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The private company and its promoters are accused of creating a number of shell companies and fictitious entities (the Bandra Book entities) and siphoning off huge funds by disbursing them to such “fictitious entities”. “It was further alleged that separate audits conducted by other private audit accounting organisations had identified multiple instances of diversion of funds by the accused for personal benefits and falsification of books of accounts to camouflage & conceal dubious transactions,” the central agency added. 

The CBI said it was also revealed in the audits that large value loans were provided to these “fictitious entities without due diligence and without securities”. “Instances of sanction and disbursement of loans, merely by e-mail communications were allegedly found for which no loan files were maintained in the said private (Borrower) company,” the central agency said. Further investigation is underway in the matter.