CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.

CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.
CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.
CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.
CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.

CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.

CBI Books Mumbai-Based Unity Infraprojects Ltd for ₹3,847.58 Crore Bank Fraud.

Pic/representational

In a significant development, the Central Bureau of Investigation (CBI) has taken action against Mumbai-based Unity Infraprojects Ltd and its former CMD, Kishore Krishnarao Avarsekar, along with other individuals. The agency has booked them for their alleged involvement in a massive bank fraud amounting to ₹3,847.58 crore. The case was initiated following a complaint lodged by the State Bank of India (SBI), a member of the consortium, which accused the company of engaging in fraudulent activities within the Commercial Branch of the bank in Mumbai. The CBI alleges that the accused manipulated financial transactions and manipulated records with the intent to deceive and unlawfully benefit from the bank’s resources.

SBI’s Alarming Discovery.

The State Bank of India, one of the consortium members, revealed that the fraudulent activities came to light during a forensic audit conducted by BDO India LLP. The auditors submitted their report on September 25, 2019, exposing a web of deceit and financial irregularities. The report detailed a series of fictitious transactions, improper adjustments made to facilitate fraudulent accounting entries, and the diversion of funds through non-consortium accounts. These manipulative actions were undertaken to defraud the bank by tampering with data and misappropriating funds.

Anatomy of Deceit

The forensic audit also highlighted several other concerning aspects of the fraud. Among them were unexplained excess payouts, suggesting a deliberate attempt to siphon off bank funds. Additionally, the report shed light on related party transactions aimed at diverting borrowed funds for unauthorized purposes. These revelations have raised serious questions about the integrity and governance of Unity Infraprojects Ltd.

From Non-Performing Asset to Fraud

Unity Infraprojects Ltd, a 44-year-old infrastructure company, had obtained ₹3,800 crore in loans from 23 different lenders, pledging both movable and immovable assets, as well as personal and corporate guarantees. However, the company’s financial health deteriorated, and it was classified as a non-performing asset on June 24, 2014. Subsequently, after a comprehensive forensic audit exposed the irregularities, it was declared a fraud five years later.

This recent case underscores the importance of rigorous auditing and vigilance within the banking sector, as well as the need for stronger measures to prevent such large-scale financial frauds. The CBI is now set to investigate the matter further to bring those responsible to justice and safeguard the interests of the banks involved.

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