Vijayawada, Aug 21 (IANS) The Central Bureau of Investigation (CBI) has registered a case against a Vijayawada-based private company, its four directors and unidentified public servants and private persons in connection with an alleged Rs 24.81 crore fraud involving the Union Bank of India.
The FIR was registered on August 18 at CBI ACB Visakhapatnam on a written complaint filed by Chinari Srikanta Patro, Assistant General Manager, Union Bank of India, Zonal Office, Vijayawada.
The CBI said in a release on Friday that the FIR names Omkara Vijayalakshmi Strips Pvt Ltd as accused number one and its directors Kota Bhanu Prasad, Kota Sravani, Kota Prudvi Venkata Teja and Kota Rahul Sai Balaji as accused numbers two to five. Unknown public servants and private persons have also been named as accused.
The case has been registered under Sections 120-B, 406, 420, 468 and 471 of the IPC; Sections 61(2), 316(2), 318(4), 336(3) and 340(2) of the Bharatiya Nyaya Sanhita (BNS); and Section 13(2) read with Section 13(1)(a) of the Prevention of Corruption Act, 1988, as amended in 2018.
According to the FIR, the company was incorporated in 2017 and was engaged in manufacturing electronic resistance welded (ERW) galvanised pipes and other steel products.
The FIR stated that during 2024, the company’s directors entered into a criminal conspiracy with unknown public servants and private persons and approached Union Bank of India’s Suryaraopeta Branch, Vijayawada, to take over its loan from Karur Vysya Bank by submitting false financial statements and other documents.
Based on the documents submitted by the borrowers, the bank sanctioned fund-based and non-fund-based credit facilities aggregating to Rs 24.98 crore on February 22, 2024, the FIR stated.
The borrowers allegedly offered stocks, book debts and plant and machinery as primary security, along with mortgage of immovable properties as collateral security, according to the FIR.
However, a unit inspection allegedly revealed a substantial discrepancy between the stock declared by the borrower and the physically available stock.
According to the FIR, the borrower declared stock worth Rs 23.85 crore, while physically available stock was found to be worth only around Rs 25 lakh, with no commensurate evidence of sales or turnover.
It stated that two directors of the company resigned within six months from the date of sanction of the loan without obtaining prior permission from the sanctioning authority and subsequently floated a new company, M/s Nerro Steels Pvt Ltd, which had a charge of Rs 6.01 crore with Canara Bank.
According to the FIR, an internal investigation found that substantial funds were remitted to Karur Vysya Bank without commensurate realisation of sales proceeds, while ageing of book debts was allegedly not disclosed.
The FIR also mentioned routing of transactions through current accounts, suspicious transactions with limited entities, unauthorised changes of directors and statutory auditors, and movement of stock from the unit without intimation to the bank.
The FIR stated that major payments were observed in the name of Maruthi Traders and major credits amounting to Rs 32.19 crore out of total credits of Rs 67.54 crore were observed in the name of Sri Durga Bhavani Steels.
According to the FIR, the two firms were established only in 2024 and were not operational as on the date of the bank’s enquiry. The FIR stated that this prima facie indicated that the entities were used for siphoning of funds and artificially inflating the turnover to enhance the credit eligibility of the company.
The FIR stated that the directors, in conspiracy with unknown public servants and private persons, furnished false and fabricated financial information, inflated stock and book-debt statements and concealed material financial information, thereby inducing the bank to sanction credit facilities.
The account was classified as NPA on June 23, 2025, due to non-servicing of interest, with outstanding dues of approximately Rs 26.05 crore, including accrued interest, the FIR stated.
The FIR put the alleged wrongful loss to the bank at Rs 24,81,47,000, with corresponding wrongful gain to the accused.
–IANS
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