The Central Bureau of Investigation (CBI) has launched a formal investigation into Unity Infraprojects Limited (UIL) and its top management’s alleged involvement in a massive fraud. The FIR, filed by the CBI, names UIL’s Chairman and Managing Director, Kishore K Avarsekar, his wife, two sons, and five other corporate guarantors as accused parties.
According to the FIR, these individuals and entities are suspected of defrauding the State Bank of India (SBI) and 15 other consortium lenders to the tune of approximately Rs 3,847.58 crore, reports The Indian Express.
The investigation was initiated by a written complaint submitted by a senior SBI official on August 17, 2023, highlighting a complex trap of financial wrongdoing. Unity Infraprojects Limited (UIL), was known for its involvement in high-profile construction projects such as the restoration of the Mantralaya building after a fire incident in 2012, the construction of the Thackeray family bungalow Matoshree at Kalanagar, the Dadar TT flyover, and the CSM subway.
The complaint highlights that UIL has had a long-standing banking relationship with SBI since 2004. Over the years, the company has availed of various credit facilities, both fund-based and non-fund-based, totaling approximately Rs 703.63 crore from SBI as part of an overall credit exposure of nearly Rs 3,800 crore from a consortium of 23 lenders.
The FIR further discloses that the account with SBI became a non-performing asset (NPA) on June 24, 2014, and was subsequently classified as fraud by the fraud identification committee in a meeting held on November 8, 2019. It was only after a forensic audit conducted by M/s BDO India LLP submitted their reports on September 25, 2019, that the extent of the alleged fraud came to light.
“The said company, by way of fictitious transactions undertaken by it through fraudulent Letter of Credit trade model, improper adjustment entries by fudging data, diversion of funds through non-consortium accounts, diversion of funds through related parties, and unexplained excess pay-outs, siphoned off the funds of the State Bank of India and other consortium banks, and thereby cheated these banks,” the FIR mentioned.
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The FIR stated that the complaint, prima facie, points to the commission of offences related to criminal conspiracy, cheating, and criminal misconduct under various sections of the Indian Penal Code and the Prevention of Corruption Act, 1988. The CBI is poised to conduct a thorough investigation into the matter.
While a total of 23 lenders were involved, the complaint specifies that only 16 banks provided their estimated loss figures and authorised the filing of the complaint. Key lenders implicated in this case include Bank of Baroda, Central Bank of India, ICICI Bank, Indian Bank, and Union Bank of India, among others.
