CBI chargesheets former CMD, 2 officials of Corporation bank in fraud case

The CBI on Friday said it has filed a supplementary chargesheet against a former chairman/managing director and two others of the Corporation Bank in connection with a bank fraud, officials said on Friday.

The chargesheet was filed in a Mumbai Court.

The case in which Ramnath Pradeep, the former CMD, Corporation Bank, SN Murthy Shankar, the former Chief Manager, and AP Shiva Kumar, the former senior manager of the Bank have been chargesheeted, was registered in 2017.

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According to the officials, the Corporation Bank had lodged the case against it's officials and a Mumbai based private firm.

The private firm was incorporated in 1994 was engaged in manufacturing of Aluminium Foil Containers. They allegedly took credit of Rs 60 crore from e-Corporation Bank (now UBI). The firm which took the loan for doing business allegedly diverted the fund. .

After diverting the fund, the firm invested it into real estate. Thus they caused a huge loss to the bank in the name of loan.

The complaint filed by the bank had mentioned about the involvement of it's high rank officials. The Bank officials allowed disbursement of Rs 59 crore without confirming the drawing power with the lead bank.

As per he officials, the accused bank officials also extended the time limit to the private firm for seeking NOC from the lead bank inducting Corporation Bank in consortium. They subsequently dispensed with the condition of seeking NOC from the lead bank of the consortium.

The former CMD of the bank sanctioned working capital limit of Rs 60 crore to the firm on the pretext of refusal by three of the existing banks of consortium to share the enhanced limits.

It was alleged that the accused did not ensure seeking confirmation from three banks about the reasons for refusal to take their share in enhancement of limits and sanctioned their share without ascertaining the factual position of financial closure and tie-up status.

Sanction of said CC limit was in contravention of the lending policy of the bank.

The accused bank officials also waived the condition of obtaining NOC from Lead Bank which caused the bank financial loss.

As per the officials, the accused associated in the appraisal of the sanction proposal of private firm knowing fully that the applicant of the loan was neither a director nor an authorized signatory of borrower company.

They associated in preparing the memorandums for modifications of the sanction terms with regard to the private firm and did not verify the actual position of the working capital requirement of company from the lead bank, the sources said.

It was also alleged that the accused did not comply with the modified sanction terms and allegedly disbursed the loan without informing the Lead Bank about the sanction.

In December 2020, the CBI had filed it's first chargesheet in the matter.