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The Central Bureau of Investigation on Tuesday carried out searches at various locations in Mumbai and Uttar Pradesh after filing a case against Frost International Ltd, a Mumbai-based company involved in merchant trading and import and export of various commodities, and its promoters on charges of cheating a consortium of banks worth Rs 4,061.95 crore in 2011.
 
The CBI teams carried out searches two days after the agency registered an FIR against some unidentified bank officials, the firm and 13 individuals, including promoters Udai Jayant Desai, Sujay Udai Desai, Sunil Lal Chand Verma and Anoop Kumar Wadhera, directors and guarantors of the company.
 
The searches were conducted at 13 places, including the office premises of the private companies, and at the residential premises of the present and past directors, guarantors of the company in Mumbai (three places), Delhi (four places) and Kanpur(six places).
 
In its FIR filed on January 19, the agency has framed charges against Frost International and others for cheating a consortium of 14 banks led by Bank of India to the tune of Rs 4,061.95 crore Bank of Baroda (BoB), Canara Bank, Central Bank of India, Andhra Bank, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank, Union Bank of India, Indian Overseas Bank, UCO Bank, Vijaya Bank, Allahabad Bank and United Bank of India are the other banks in the consortium.
 
Look Out Circulars (LOC) have also been issued against all of them at airports and entry-exit points across India so that they don't leave the country.
 
As per the complaint filed by Bank of India's Kanpur branch, Frost International had been banking with it and other banks in the consortium since 1996.
 
The FIR says in the loans taken from the consortium, BOI has the highest exposure of Rs 756 crore which the company has not repaid.
 
The stress in the account is observed from January 2018 onwards in the consortium of 14 banks, when Letters of Credit started devolving with member banks as export proceeds were not realized, the FIR said.
 
"The company could not deposit the overdue amount and account is classified as NPA (Non Performing Asset) by all the member banks."
 
The consortium later decided a forensic audit and its report dated January 5 last year found that there was a potential diversion of funds by way of providing unsecured loans to group companies and that there was no actual export of goods against merchant trade transactions.
 
It also found purchases and sales took place among parties known to each other and that the majority of payments towards sales were received from third parties and not from the parties to whom the goods were sold.
 
The company is engaged in trading of multiple agro commodities, minerals and metals, bullion, polymer, chemical and petroleum products, plastic, textiles and other items.
 
It has suppliers across the globe including Bangladesh, China, Hong Kong, the US and the UAE, West Indies, Cambodia, Saudi Arabia, Switzerland and Taiwan.
 
Frost International Ltd registered office is in Bandra Kurla Complex, Mumbai, its head office and international marketing division is in Hospitality District, New Delhi and the corporate office is in Kanpur.
 
The company allegedly diverted the banks' fund by giving unsecured loans and advances to its non-business related parties, the FIR said.
 
"There were variations in sales and purchase prices of non-Merchant Trade transactions and some of the non-Merchant Trading parties were found non-existent and mismatch in Merchant Trade transactions, with either port of loading and discharge or mismatch in the date of vessel movement.
 
"Inordinate time gap has also been observed in some of the bills of lading date compared to the vessel exit date at the same port. All these factors indicate that there was no actual export of goods against the Merchant Trade transactions.
 
"It was also alleged that the private company had submitted list of debtors, against whom it did not initiate any action for recovery of their dues, even after the outstanding remained for more than 12 months," the FIR said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    COMMENTS

    tosahilchopra

    1 month ago

    The title of the article is wrong.

    CBI books Frost International in Rs4,000-crore bank fraud, raids 13 places
    The Central Bureau of Investigation on Tuesday carried out searches at various locations in Mumbai and Uttar Pradesh after filing a case against Frost International Ltd, a Mumbai-based company involved in merchant trading and import and export of various commodities, and its promoters on charges of cheating a consortium of banks worth Rs 4,061.95 crore in 2011.
     
    The CBI teams carried out searches two days after the agency registered an FIR against some unidentified bank officials, the firm and 13 individuals, including promoters Udai Jayant Desai, Sujay Udai Desai, Sunil Lal Chand Verma and Anoop Kumar Wadhera, directors and guarantors of the company.
     
    The searches were conducted at 13 places, including the office premises of the private companies, and at the residential premises of the present and past directors, guarantors of the company in Mumbai (three places), Delhi (four places) and Kanpur(six places).
     
    In its FIR filed on January 19, the agency has framed charges against Frost International and others for cheating a consortium of 14 banks led by Bank of India to the tune of Rs 4,061.95 crore Bank of Baroda (BoB), Canara Bank, Central Bank of India, Andhra Bank, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank, Union Bank of India, Indian Overseas Bank, UCO Bank, Vijaya Bank, Allahabad Bank and United Bank of India are the other banks in the consortium.
     
    Look Out Circulars (LOC) have also been issued against all of them at airports and entry-exit points across India so that they don't leave the country.
     
    As per the complaint filed by Bank of India's Kanpur branch, Frost International had been banking with it and other banks in the consortium since 1996.
     
    The FIR says in the loans taken from the consortium, BOI has the highest exposure of Rs 756 crore which the company has not repaid.
     
    The stress in the account is observed from January 2018 onwards in the consortium of 14 banks, when Letters of Credit started devolving with member banks as export proceeds were not realized, the FIR said.
     
    "The company could not deposit the overdue amount and account is classified as NPA (Non Performing Asset) by all the member banks."
     
    The consortium later decided a forensic audit and its report dated January 5 last year found that there was a potential diversion of funds by way of providing unsecured loans to group companies and that there was no actual export of goods against merchant trade transactions.
     
    It also found purchases and sales took place among parties known to each other and that the majority of payments towards sales were received from third parties and not from the parties to whom the goods were sold.
     
    The company is engaged in trading of multiple agro commodities, minerals and metals, bullion, polymer, chemical and petroleum products, plastic, textiles and other items.
     
    It has suppliers across the globe including Bangladesh, China, Hong Kong, the US and the UAE, West Indies, Cambodia, Saudi Arabia, Switzerland and Taiwan.
     
    Frost International Ltd registered office is in Bandra Kurla Complex, Mumbai, its head office and international marketing division is in Hospitality District, New Delhi and the corporate office is in Kanpur.
     
    The company allegedly diverted the banks' fund by giving unsecured loans and advances to its non-business related parties, the FIR said.
     
    "There were variations in sales and purchase prices of non-Merchant Trade transactions and some of the non-Merchant Trading parties were found non-existent and mismatch in Merchant Trade transactions, with either port of loading and discharge or mismatch in the date of vessel movement.
     
    "Inordinate time gap has also been observed in some of the bills of lading date compared to the vessel exit date at the same port. All these factors indicate that there was no actual export of goods against the Merchant Trade transactions.
     
    "It was also alleged that the private company had submitted list of debtors, against whom it did not initiate any action for recovery of their dues, even after the outstanding remained for more than 12 months," the FIR said.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    User

    COMMENTS

    m.prabhu.shankar

    4 weeks ago

    I think its time we restrict the loans from PSBs to corporates based on their annual turnover. Lend to companies only if their annual turn over is less than 100 crores. Anything above don't lend them. Let them get the money for their expansion through stock markets. Why are we unnecessarily giving the money of middle and poor class people to these people who are nothing but thieves. PSBs should focus on MSMEs, SMEs, Middle Class people and Poor people.

    kiran

    1 month ago

    How do the psu banks honchos expect immunity from CBI,CVC,ED ? There is no full stop or comma till an unknown trading co. runs up dues of >4000 Cr. from n number of banks ?

    ED to auction 15 artworks, watches from Nirav Modi assets
    The Enforcement Directorate on Tuesday roped in Saffronart, a leading international auction house, for auctioning seized assets of fugitive Nirav Modi.
     
    A live auction in Mumbai on February 27 will take place, followed by an online auction on Saffronart's platform on March 3 and 4.
     
    Collectively, the two auctions will feature 15 artworks by significant modern and contemporary Indian artists as well as a selection of luxury watches, handbags and cars.
     
    Highlights of the auction include a 1935 masterpiece by Amrita Sher-Gil, a significant oil on canvas by M.F. Husain from his 'Mahabharata' series. Both the art works have been estimated at Rs 12 to 18 crore. 
     
    The exhibition will also showcase a serene blue painting by V.S. Gaitonde from 1972 which is estimated around Rs 7-9 crore in the market, and a vivid red depiction of 'Krishna' by Manjit Bawa (estimate: Rs 3-5 crore).
     
    Apart from modern artworks, important watches which will be on sale include a Jaeger Lecoultre Men's 'Reverso Gyrotourbillon 2' and a Gerrard Perregaux Men's 'Opera One' wristwatch. Of more than 80 branded handbags included in the auction are several from the Birkin and Kelly lines by luxury retailer Hermes.
     
    CEO and Co-Founder of the auction house, Dinesh Vazirani, said, "We are extremely honoured to lend our services and expertise to the Enforcement Directorate, Government of India. We are diligently working with the ED to assess and evaluate each item and put together the catalogue for both the sales, which includes a distinguished line-up of artworks."
     
    This is the first time that the Enforcement Directorate has appointed a professional auction house to conduct an auction of seized assets in India.
     
    Earlier, the Income Tax Department, in March 2019, had appointed the same auction house for the bidding that raised Rs 54.84 crore.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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