Nagpur: Controversy hovered over Manoj Jayaswal’s Abhijeet Group as CBI booked him along with his other directors of the company including Abhishek Jayaswal (son), Arun Kumar Srivastava and PN Krishnan, in a Rs 291 cr bank fraud. Meanwhile in a related development, the Nagpur Bench of Bombay High Court, on Thursday, directed managing director of Neco Group to deposit Rs 105 crore with its registry. The orders came while hearing a petition by Corporate Ispat Alloys Limited, owned by Manoj Jayaswal, on a dispute pertaining to distribution of property.
CBI had raided Jayaswal’s residence and office on Wednesday and filed an offence against him for fraudulently availing a letter of credit (LC) facility from Canara Bank and Vijaya Bank.
According to a press release issued by CBI, the raids were conducted on the basis of complaints by Canara Bank and Vijaya Bank, for an alleged fraud of 290.77 crore in all. The accused entered into a criminal conspiracy with each other and cheated both the banks. Canara Bank lost 218 crore and Canara Bank has taken a hit of 71 crore, said the release.
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The companies included in the FIR are — Abhijeet Projects, Avijeet Projects and Simplex Infrastructure and other unknown persons. The persons booked in the case in their capacity as directors of these companies are — Manoj Jayaswal, Abhishek Jayaswal (son), Arun Kumar Srivastava and PN Krishnan.
Searches were conducted at three places in Kolkata, six places in Nagpur and one place each in Mumbai and Gurgaon, which led to recovery of incriminating documents, said the sleuths.
Bankers say a typical letter of credit (LC) fraud is where the buyer and seller are same or related persons. Suppose X wants to buy a machine from Y and does not have funds readily. In that case, X can approach his bank and get a LC issued, to be given to Y, the seller. The LC matures after a three-month period, but Y can get it encashed before the term at a discount. At the end of the term, Y’s bank recovers the amount from X’s bank. The amount forgone as a discount initially is paid to Y, and the rest is kept by his bank. X’s bank pays the amount from his current account or loan account.
At times, both the buyer and seller are sisters concerns or dummy firms and there is no actual sale or purchase. If the money is realised from X’s loan account, it does not make any difference to the bank. But the question arises when it is taken from the loan account, and, to make things worse, the loan is defaulted, explained a banker.
Meanwhile, hearing the petition of Corporate Ispat Alloys Ltd, the HC asked Neco Group to deposit Rs 290 cr. The petition was filed by managing director of Corporate Ispat regarding agreement both companies arrived at on distribution of property. It included iron and steel units which were adjusted in Neco group that had a Rs 365 crore liabilities in the bank. Within two years of this adjustment, the petitioner refunded loan of 105 crore with interest and requested Neco group to repay it. But when no response came, the petitioner took to the court.
