The National Small Industries Corporation has accused the United Bank of India of providing "factually incorrect" information to stock exchanges and not releasing over Rs 173 crore in lieu of bank guarantees, days after the Enforcement Directorate launched a probe into the bank guarantees case.
The NSIC, which functions under the Ministry of Micro, Small and Medium Enterprises (MSME) and aims to promote micro, small and medium enterprises in the country, sent letters to National Stock and Bombay Stock Exchanges besides the company secretary of the United Bank of India (UBI).
"...We wish to clarify that the clarification given by the United Bank of India....is factually incorrect," company secretary of NSIC Nishtha Goyal wrote to her counterpart in the UBI.
The letter said that bank guarantees amounting to Rs 173.50 crore "were subsequently invoked by NSIC and the invocation proceeds of these bank guarantees are yet to be released by the UBI to NSIC".
"With regard to the version of UBI on the periodically and premature invocation of Bank Guarantees (BG) amounting to Rs 155.50 crore by NSIC is incorrect. It is clarified that these guarantees were not invoked by NSIC as alleged by the UBI and NSIC was in possession of the original BGs amounting to Rs 155.50 crore.
"Further, as regards to the non-existence of BGs valuing Rs 18 crore in the UBI records, it is clarified that the BGs were issued by the UBI" and originals were in possession of the NSIC, Goyal said.
A similar worded letter was sent to Bombay and national stock exchanges by the the Chief Vigilace Officer of the NSIC Rajan Trehan.
UBI had last week informed the BSE and NSE that it would like to "clarify that the Bank had issued Bank Guarantees (BG) amounting to Rs 155.50 crore to NSIC against 100 per cent margin. NSIC sought confirmation for further BGs amounting to Rs 18 crore which as per bank are non-existent in its records.
"The BGs amounting to rs 155.50 crore were periodically and prematurely invoked by NSIC and the amounts duly credited to their account," the UBI had said in its clarification.
The allegation and counter-claims started days after the Enforcement Directorate registered a money laundering case in connection with an alleged fraud of over Rs 173 crore in the UBI in 2016, involving the NSIC in West Bengal.
The central probe agency's zonal office in Kolkata has filed a criminal case under the Prevention of Money Laundering Act (PMLA) taking cognisance of a July 2016 FIR of the West Bengal CID.
Officials said the case of alleged fraud in the UBI pertains to providing fake bank guarantees to the raw material assistance scheme of the NSIC.
The WB CID has filed a criminal case, acting on a complaint sent by the chief vigilance officer (CVO) of the NSIC, against 23 people, including an ex-employee of the organisation S K Halder, private person Debabrata Halder and a few employees of the bank.
Officials of the UBI in collusion with the parties and consultants like S K Halder and Debabrata Halder with ulterior motives caused a "wrongful loss" of Rs 173 crore to the bank, the police FIR has alleged.
The ED will now probe if the alleged tainted funds generated in this case were laundered and used to create illicit assets by the accused.
As per the police FIR, under its raw material assistance scheme, the NSIC provides short-term finance to the MSMEs for their raw material procurement in West Bengal by making direct payment to raw material suppliers against 100 per cent security of bank guarantees of nationalised or approved banks.
"The majority of the (fraudulent) bank guarantees stated to be invoked were issued for a period of three years and are reported to be invoked immediately within a period of 2-4 months after issue of bank guarantee," the FIR said.
In certain cases, it said, the NSIC detected "fraudulent transactions" and hence filed a police compliant in 2016.
The FIR said the NSIC detected such fraudulent instances in at least four of its branches in West Bengal -- Salt Lake, Kolkata, Howrah and Durgapur.
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