The Income Tax department's ongoing searches at the premises of Vadodara-based firm DPIL have revealed that its promoters obtained loans by showing a huge turnover through bogus intra-group transactions of Rs 550 crore, an official said today.
Diamond Power Infrastructure Ltd (DPIL) is accused of cheating various banks to the tune of Rs 2,654 crore.
The I-T department began searching the premises of the firm and its promoters on April 10, which are still ongoing.
While going through the accounts of DPIL and other companies floated by its promoters, I-T officials discovered fraudulent transactions, where one company 'sold' products to another company in the same group, the IT department official said.
"As of now, we have unearthed such fraudulent transactions worth Rs 550 crore while going through 2017-18 accounts alone. We are yet to check records of previous years. The promoters showed a high turnover through bogus transactions between their own companies," he said.
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DPIL, which manufactures electrical cables and equipment, is promoted by S N Bhatnagar and his sons Amit Bhatnagar and Sumit Bhatnagar.
"Out of the total turnover of Rs 600 crore of two group companies in 2017-18, Rs 550 crore was through such bogus transactions," the official said.
The IT department initiated the action following raids by the Central Bureau of Investigation and the Enforcement Directorate on the company offices and the promoters' residences.
The official said though no seizure has been made yet, at least nine bank lockers of the promoters have come to light.
According to the CBI, DPIL fraudulently availed credit facilities from a consortium of 11 banks (both public and private) from 2008, leading to outstanding debt of Rs 2,654.40 crore as of June 29, 2016. It was declared a non-performing asset in 2016-17.
The company allegedly submitted false stock statements to the lead bank by treating 'receivables more than 180 days' (non-current assets) as 'less than 180 days' (current assets) to get more drawing power in the cash credit accounts.
The CBI alleged that DPIL extensively utilised cash credit limits for obtaining a large number of letters of credit, and many of them could not be honoured by the company and were thus "forced charged" on the credit limit.
Among the consortium, Bank of India's exposure to the company is Rs 670.51 crore, Bank of Baroda's exposure is Rs 348.99 crore and that of ICICI Bank is Rs 279.46 crore, the CBI FIR said.
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