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CBI books Frost Intl in Rs 4,000-cr fraud, raids various places
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SME Times News Bureau | 21 Jan, 2020
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.
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 has been banking with it and 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.
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