Alleged bank fraud case: CBI files chargesheet against directors of Lakhani Shoes Limited

The Central Bureau of Investigation (CBI) has filed a chargesheet in an alleged bank fraud case of over Rs 53 crore. The case was registered four years ago against Lakhani Shoes Limited and its two directors before the Court of Special Judicial Magistrate CBI Chandigarh.

The CBI registered a case on October 4, 2021, for the offences punishable under Sections 120 B, 420, 468, 471 and 13 (2) read 13 (1) (d) of the Prevention of Corruption Act on the complaint filed by Chief Regional Manager of Indian Overseas Bank, Chandigarh.

The complainant said the company's main business is manufacturing and trading of different types of footwear. The officer said that the company took a loan from the bank at different times. The loan was declared Non Performing Asset (NPA) on December 12, 2021. Later, the outstanding amount over Rs 53 crore was declared fraud and reported to the RBI as well.

Initially, the loan facilities were granted at Faridabad branch and after the account became NPA, the account was transferred to the Specialised ARM branch, Chandigarh.

He said that as per forensic audit report dated July 30, 2019, the auditors have observed that the company utilised the funds for investment in group concerns and for purposes other than capital expenditure.

The report further says that the company utilised its cash credit facility for repayment of term loan of its sister concerns and had willingly sold products at cheap price to the related parties to divert the funds. There were several instances of cash withdrawal and the borrower company had forged its book of accounts to manipulate the financial statement. The officer said that as a result of the fraud, the bank suffered a loss of over Rs 53,61,48,472 plus undebited interest. The court has issued notices to the accused for May 29.