Reeling under allegations of orchestrating a Rs 97.85 crore bank fraud at Oriental Bank of Commerce, Simbhaoli Sugars Ltd. has said that it’s committed to clear all outstanding dues with the bank in due course of time in consultation with all the lenders, PTI reported. The Central Bureau of Investigation (CBI) registered a case of bank fraud on 24 February against the Ghaziabad-based Simbhaoli Sugars Ltd., its Chairman Gurmit Singh Mann, Managing Director Gurpal Singh and a few others related with the alleged bank loan fraud of Rs. 97.85 crore. The company on Monday midnight informed the stock exchanges in a filing that it has been regularly paying all its dues to the bank but for periodic adverse cycles that the sugar industry faced recently, PTI reported.
OBC filed a complaint against the company and also referred it to the CBI. The company will fully cooperate with the investigating agencies in this regard and soon submit a required clarification as well, PTI reporting citing filing details. The shares of Simbhaoli Sugars Ltd closed at Rs 14.75 up by nearly 4 percent on NSE on Monday. The shares of Oriental Bank of Commerce ended the day at Rs 93 down by 3 percent. Meanwhile, CBI till now has conducted raids at nearly 8 premises in connection with the company and its promoters, PTI reported. On Monday, CNBC TV18 reported citing OBC that the bank has allocated enough provisioning to cover the exposure against Simbhaoli Sugars Ltd. The exposure that OBC has against Simbhaoli Sugars Ltd., one of the largest sugar companies in the country, will not pose any material impact on the bank’s profitability, CNBC TV18 reported citing OBC.
After Oriental Bank of Commerce registered an FIR against Ghaziabad-based Simbhaoli Sugars Ltd., CBI started investigating two loans which were given to the company. One of the loans to the tune of Rs 97.85 crore was declared fraud in the year 2015. The bank took other loan amounting to Rs 110 crore to repay the earlier one and it was declared a bad loan in the year 2016.
Sugar firms have been reeling under immense pressure in the last few years due to a variety of reasons. Although government has taken various measures, recovery is still a long way for this sector.