CBI arrests REI Agro chairman, promoter for bank loan fraud

NEW DELHI: The Central Bureau of Investigation (CBI) on Thursday arrested Sandip Jhunjhunwala and Sanjay Jhunjhunwala, both promoters-directors of REI Agro Limited in an on-going investigation of a case to unearth the larger conspiracy and to trace the diversion and end use of funds.

A case was registered against the firm and others on charges of cheating, criminal conspiracy, forgery and impersonation on a complaint of UCO Bank relating to allegations of cheating 14 consortium member banks (led by UCO Bank) to the tune of Rs 3,872 crore.

It was also alleged that the accused had defrauded 14 public sector banks through diversion of funds, showing high cost of false capital expenditure, suspected investment in related companies, falsely inflating debtors, sale at higher price to related/doubtful parties, fraudulent high sea transactions, non-compliance with fund utilisation, corporate guarantee without permission of consortium members etc.

It was further alleged that there was no genuine business with the debtors/creditors and false bills were issued by/in favour of REI. More than 150 shell firms were allegedly arranged through a group of brokers against fixed commission, for obtaining false invoices and diversion of bank funds.

It was also alleged that some of the suppliers were non-existent and some other firms were having no genuine business with the firm and had routed the funds of the firm through their accounts.