As many as seven sugar companies, including Simbhaoli Sugars Ltd (SSL), against which the Central Bureau of Investigation (CBI) has already registered a case on 22 February for fraudulently diverting bank loans, are under the scanner of the Enforcement Directorate (ED), sources have said.

An ED source close to the investigation told The Sunday Guardian: “Besides SSL, there are six companies which have failed in repaying loan amounts ranging from Rs 50 lakh to Rs 110 crore and are under the ambit of ED’s investigation. It was revealed that most of these sugar companies are based in Uttar Pradesh and Maharashtra and have not paid loan instalments to the banks for more than five years.” 

“After receiving pleas from the banks concerned for carrying out investigation against all these sugar companies, including SSL, earlier this month, ED officials started investigation and have found sufficient evidence of fraudulent diversion of loan amounts done by these companies,” the source quoted said. On the complaint of the Oriental Bank of Commerce (OBC), the CBI has already registered a case against officials of SSL and raids were conducted at premises linked to SSL; the ED is yet to start its action in the case. The CBI had registered a case against top officials of SSL on 22 February, including its Deputy General Manager Gurpal Singh, who is the son-in-law of Punjab Chief Minister Captain Amarinder Singh, for an alleged bank loan fraud of Rs 97.85 crore and default of Rs 110 crore.

According to the CBI, the agency has also conducted searches at the offices of the company and residences of its officials at eight places, including one location each in Hapur and Noida, and six locations in Delhi. As per the OBC’s complaint, loan was sanctioned for financing 5,762 sugarcane farmers under the cooperative farming scheme from 25 January 2012 to 13 March 2012. The loan was allegedly fraudulently diverted by the company for its own needs.

A senior ED official told The Sunday Guardian: “ED officials are investigating the matter related to the bank fraud of SSL and six other sugar companies. After a detailed investigation, the directorate will register FIR.” 

After the Nirav Modi case, a sudden spurt has been reported in cases related to bank frauds. On 24 February this year, the CBI registered another case against Dwarka Das Seth International Pvt Ltd, a Delhi-based diamond jewellery company. 

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