Chargesheet against Lakhani Shoes in Rs 53 cr bank fraud case

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

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The CBI registered the 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 October 4, 2021, on the complaint filed by Chief Regional Manager of Indian Overseas Bank, Chandigarh.

He said that the bank had many branches across the country, including one in Faridabad and a specialised ARM branch in Chandigarh. The complainant said the company’s main business was manufacturing and trading of different types of footwear. The bank had been giving loans to the company for its business expansion. The officer said that the company took the loan from the bank at different times. The loan was declared a non-performing asset (NPA) on December 12, 2021.

Later, the act of taking loans totaling over Rs 53 crore was declared misappropriation of funds and reported to the RBI also. Initially, the loan facilities were granted at the bank’s Faridabad branch and after the account became NPA, the account was transferred to ARM branch, Chandigarh.

He said that as per the forensic audit report dated July 30, 2019, the auditors had observed that the company had utilised the funds for investment in group concerns and for the purpose 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 findings of the forensic audit of the account indicate wilful diversion of funds and cheating with the bank. The officer said that as a result of the fraud the bank suffered losses of over Rs 53.61 crore plus interest. The court has issued the notices to the accused for May 29.