INDIA. Mumbai: Central Bureau of Investigation (CBI) conducted searches at six locations, including Delhi, NOIDA, Ghaziabad (Uttar Pradesh), and Gurugram (Haryana), in connection with an offence registered against a New Delhi/NOIDA-based company on charges of duping the Union Bank of India (UBI) of Rs. 109.17 crore in a loan fraud case on Thursday.
Gardenia India Limited (GIL) was classified as an NPA by UBI on December 31, 2015 and the erstwhile Corporation Bank on July 2, 2014.
The company was set up on January 18, 2007, with an objective to carry on the business of owning, building, developing, and promoting residential, commercial, and industrial buildings, as well as cinema houses. It also aimed to deal with all kinds of immovable properties belonging to the group, the CBI statement read.
The aforementioned corporation had gotten term loans from Corporation Bank and the Union Bank of India. Aside from the directors of the company’s personal guarantees two other private businesses with headquarters in Delhi also contributed a corporate guarantee.
It was alleged that this company cheated the bank by diverting the funds and disposing of assets without the bank’s permission. The sale proceeds were not routed through the “project-specified” current accounts.
Besides, it diverted a huge amount of money to its related parties and subsidiaries. It was also alleged that the company violated terms and conditions by opening accounts in non-consortium banks and receiving large sums in those accounts, which were then diverted.
The CBI said that the company had not obtained the No Objection Certificate (NOC) from the lender banks before selling hypothecated flats and had misrepresented the financial figures and information, which led to the concealment of material information from the bank.
The searches led to the recovery of several incriminating documents and articles, and further investigation was underway, the CBI stated.
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