ACB registers case against J&K Bank officials in multi-crore loan fraud

Jammu (Jammu and Kashmir) [India], June 28 (ANI): The Anti Corruption Bureau (ACB) has booked the management and some officials of the J&K Bank along with the illegal beneficiaries involved in loan fraud worth crores of rupees, an officials release said on Friday.
The ACB also conducted searches at various premises. A joint surprise check was conducted by the ACB on the allegations of financial irregularities committed by J&K Bank officials.
"Various loan facilities were extended to the proprietors of a partnership firm M/s Paradise Avenue during the period 2012 to 2017 in contravention to the laid down norms and procedures of the Bank and resultantly the loan accounts turned into NPA," the ACB release read.
The ACB said the proprietors of the firm approached J&K Bank's New University Campus Jammu branch for availing of a loan of Rs 74.27 crore for setting up a residential township complex under the name and style of 'Paradise Avenue' at Narwal in Jammu consisting of 52 flats in each of the towers named Eden & Zion.
"The loan amount was sanctioned on January 30, 2012, with one of the pre-requisite conditions that loan has to be disbursed in a phased manner after securing margin of Rs 22.09 crore including an unsecured loan of Rs 2 crore from the borrowers on a pro-rata basis," it said.
ACB stated that the loan amount sanctioned by the Bank in January 2012 paved the way for the firm to purchase 30 kanals of land from different land-owners through registered sale deeds in July 2012.
The loanee firm allegedly hatched a conspiracy to show that the amount of sale consideration was paid "fraudulently" and "dishonestly" through cheques to the land-owners with the inflated cost of the land.
"Those cheques were actually taken back from the landowners and fresh cheques were issued to them from the loan account of M/s Paradise Avenue and loan account of Shree Simula Solutions, other sister concerns of the leading partner of the firm with objective and purpose to buy the land in question out of the loan amount alone sanctioned by the Bank," the release read.
During scrutiny of the bank records, ACB found that that the Bank had instead made 100 per cent disbursement in the first phase only, which was meant to be disbursed in a phased manner, conferring an undue pecuniary advantage upon the beneficiary firm.
"The firm borrowed three additional loans worth Rs 68.91 crore, Rs 20 crore and Rs 14.5 crore. Hence in total, the proprietors of the firm managed to obtain Rs 177.68 crore loan illegally and fraudulently in connivance with the bank management and its officials," the release said.
"The repayment of the loan amounts was to start from September 2017 with a quarterly installment of Rs 11.27 crore. However, the proprietors turned willful defaulters by not making repayment of the loan with the sole objective to get their loan account declared NPA and consequently, they succeeded in their goal wherein on December 12, 2017 loan account was declared NPA by the bank management," it further said.
ACB also said the bank suffered a huge loss because of the "deep-rooted conspiracy" between the bank management and the beneficiary firm.
"Principal loan amount of Rs 177.68 crore was settled at Rs 130 crore under One Time Settlement (OTS) illegally and against the bank norms, thereby the bank management by abuse of their authority waived off Rs 50 crore on the principal amount which has inflicted a huge loss to the Bank," the release read.
ACB further stated that scrutiny of records of the bank disclosed "commission" of criminal misconduct by bank management/officers/officials of J&K Bank and the partners of the beneficiary firms and others, which constituted offence under section 5(1) (d) of the J&K Prevention of Corruption Act, 2006 read with 120-B RPC punishable under section 5(2) of the Act.
The searches were conducted at various premises of individual and companies connected with the firm after the case was formally registered at Police Station ACB, Jammu. "During the search, incriminating material such as laptops/ documents, etc., were seized. The investigation of the case is going on," the release read. (ANI)