A timber company has allegedly cheated the Oriental Bank Commerce to the tune of Rs 155 crore by manipulating sanctioned credit limits of its subsidiary in Singapore using international banking messages for fund transfers without mentioning it in the bank's books, prompting the CBI to register an FIR.
Similar modus operandi was allegedly used by the companies of diamantaire Nirav Modi and Mehul Choksi to defraud the Punjab National Bank to the tune of over USD 2 billion.
Acting on the complaint of the OBC, the CBI has booked Mahesh Timber Pvt Ltd (MTPL), its directors, Ashok Mittal and Nisha Mittal, and a senior manager of the bank, Surender Kumar Ranga, who has been terminated from service, officials said.
It is alleged that MTPL owns Singapore-based Mahesh Timber (Singapore) Ltd which availed credit facilities from the branches of the SBI, Bank of Baroda and UCO Bank in that country, they said.
These facilities were backed by the Standby Letter of Credit issued by the SBI, Bank of Baroda and Oriental Bank of Commerce to the parent company MTPL, they said.
MTPL which was engaged in trading and sawing of imported timber availed credit facilities to the tune of Rs 242.09 crore from a consortium of the State Bank of India, Oriental Bank of Commerce and Bank of Baroda, the officials said.
It was found that cash credit limit sanctioned to the bank was increased from Rs 12 crore to Rs 108.11 crore in a fraudulent manner, they said.
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Giving the modus operandi, the bank alleged in its complaint that foreign letters of credit (FLC) were opened in the bank's book through Finacle -- banking software -- and SWIFT messages -- an international messaging system for banking used to pass instructions among banks globally to transfer funds, the officials said.
"Subsequently, the dealing officer without having any authority, fraudulently and in collusion with the suspected persons, increased the amount of the FLC by way of sending amendment through SWIFT without increasing the amount in bank's books (in Finacle).
"Bills lodged by the overseas bank against these LCs were confirmed for payment on due date in the SWIFT message," the complaint alleged.
It also alleged that the company in criminal conspiracy with Ranga, the dealing officer of the bank's M P Chowk branch in Karnal, Haryana, opened FLCs through Finacle and Swift messages.
Ranga allegedly gave original documents to the party and no copy of the document was available in the branch, it alleged.
On receiving the claim for payment, it came to notice that 38 documents worth USD 1.25 crore and Euro 36 lakh were incomplete where confirmation to make payment by the bank has been sent to overseas banks in Singapore through SWIFT but no entry was made in the Finacle, it alleged.
The bank obtained these documents from the borrower after the fraud was noticed, it alleged.
"The amount relating to documents claimed by foreign banks was remitted to them by debiting account of the borrower which resulted in increase of outstanding to the extent of Rs 155.21 crore against the sanctioned limit of Rs 12 crore...," it alleged.
The complaint also alleged that Ranga opened six LCs and enhanced their value exorbitantly without making any entry in Finacle.
The bank claimed that no such request was received from the borrower and Ranga did not obtain necessary margin and amendment charges.
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