About 100 agro-product companies under CBI scanner for bank fraud

Over the past five years, they have been charged with cheating banks of loans running to thousands of crores of rupees

About 100 companies dealing in agro-products came under the scanner of the Central Bureau of Investigation (CBI) over the past five years on the charge of cheating banks of loans running into thousands of crores of rupees. This year, so far, more than two dozen firms trading in items ranging from rice and spices to oil have been accused of bank fraud involving over ₹1,400 crore.

One of the major cases registered earlier this year pertains to S.A. Rawther Spices Private Limited, which exports and imports spices and coffee. The company took credit facilities from the Jammu & Kashmir Bank. As alleged, the company and its functionaries caused a loss of ₹352.72 crore to the bank. It failed to repay the loan on a regular basis and the account was declared a non-performing asset in September 2017.

Among the others, Shree Basant Oils Limited has been accused of bank fraud to the tune of ₹124 crore, and Saurav (India) Private Limited has allegedly caused wrongful loss of about ₹126 crore to its lenders.

Last year too, multiple cases were registered against the business groups trading in agro-products. One such case pertained to Shri Jalaram Rice Industries in an alleged ₹114-crore bank fraud case.

On December 31, 2021, the CBI had booked Shakti Bhog Foods Limited and others for allegedly cheating a consortium of 10 banks to the tune of ₹3,269.42 crore. Among those named in the FIR are the company’s managing director, Kewal Krishan Kumar, and directors Siddharth Kumar and Sunanda Kumar. The company is into the manufacture and sale of items like wheat flour (under the well-known brand name Shakti Bhog), rice, biscuits and cookies in northern States. In the other States, it has third party tie-ups with various entities.

"In all these cases, the lending banks have alleged diversion of funds through different modus operandi. Shell companies are used to route the misappropriated money, which is many a times round-tripped and invested in related entities. Also, properties are acquired by the accused persons using the funds. In order to get more credit facilities, the companies often inflate their net worth," an agency official said.