The Central Bureau of Investigation on Monday conducted searches in Ahmedabad in Gujarat and Pune in Maharashtra at the premises of people connected to starch manufacturer Anil Limited.
The searches come after the probe agency had filed a First Information Report on July 7 against the Ahmedabad-based firm on the complaint of Bank of India (lead consortium member).
As per the FIR, the company and seven of its directors have allegedly cheated a consortium of banks and IFCI to the tune of Rs 710.85 crore.
A CBI release issued during the day said searches were carried out at seven locations at Ahmedabad and Pune, which led to recovery of several incriminating documents, articles, some property papers and Rs 38 lakh cash.
The FIR names Amol Shripal Sheth, Kamalbhai R Sheth, Anish K Shah, Indira J Parikh, Dipal Palkhiwala, Anurag Kothawala, Shashin A Desai and unidentified public servants.
As per the complaint, the firm produced unmodified starch, modified starch from basic maize starch and downstream products like liquid glucose, dextrose monohydrate, anhydrous dextrose, sorbitol etc.
It was enjoying an aggregate credit limit of Rs 753.70 crore from a consortium of banks led by Bank of India as per last approved limits in 2014, said the CBI.
The company also availed credit facilities from financial institutions outside the consortium like IFCI, which has an outstanding of Rs 113.34 crore plus uncharged interest, the CBI release added.
When the account turned into a non performing asset in March 2016, a forensic audit by banks detected several financial malpractices in the company's account and it was declared fraud, said the CBI.
It was alleged that the company had lent funds to related parties and others without approval of consortium banks with an intention to siphon off the funds, the release stated.
The company deliberately entered into non-genuine transactions with its related parties to renew or enhance its credit facilities from the lender banks, the release said.
It was also alleged the accused had misappropriated the value of closing stock as well as fixed assets and thus cheated the banks, the CBI said.
