CBI searches 9 locations in UP in Rs 6,833 cr bank fraud case

The Central Bureau of Investigation (CBI) on Saturday carried out searches at nine locations in Uttar Pradesh in connection with a Rs 6,833 crore bank fraud case involving Kanpur-based Lakshmi Cotsyn Limited and its directors.

The amount of the fraud is even more than the Punjab National Bank fraud case involving fugitive diamantaire Nirav Modi.

A CBI spokesperson said here that the agency had registered a case on the basis of a complaint from the Central Bank of India on behalf of 10 consortium member banks against Lakshmi Cotsyn Limited its directors Mata Prasad Agarwal (director and guarantor), Pawan Kumar Agarwal (director and guarantor), Devesh Narain Gupta (director), Sharda Agarwal (Director and guarantor), unknown public servants and unknown others, for causing an alleged loss of Rs 6833.82 crore to the lender banks.

The official said that in the complaint, it was alleged that the company had reported inflated inventory records, its auction process was not fairly organised, and voluminous sale transactions were carried out with undisclosed related parties.

The funds were allegedly siphoned off or diverted by the company, which amounts to fraudulent removal or concealment of property etc. to prevent distribution among the creditors.

"The credit facilities granted to the accused were classified as fraud on July 20 last year by the Central bank Of India," the official said.

The official added that the agency carried out searches at nine locations, including in Noida, Roorkee, Fatehpur and Kanpur.