Hyderabad: The Sleuths of Central Bureau of Investigation (CBI) booked a conspiracy case against Ralco Steels Private Limited and its Managing Director Ch. Ramesh Babu and three others in an alleged Rs.70.79 crore bank fraud case.
The CBI was acting on a complaint filed by the officials of Bank of Baroda.
Ralco steels private limited was incorporated in 2010 with Registrar of Companies (RoC) in Vijayawada showing its activities as manufacture of basic iron and steel.
An investigation found that company had availed credit facility of Rs.22 crore from the bank's corporate financial services branch in Hyderabad in 2011 for setting up its plant at Bobbili for manufacturing and supplying hot-rolled pre-engineered steel structures.
Later the bank increased the limit to Rs.97.25 crore by the bank's Central Office Credit Committee. However, in 2014, the account become NPA. An independent inquiry conducted by the bank found that the company diverted funds from the term loan disbursements for revenue expenditure instead of capital expenditure.
'Fund was transferred to various other companies which were not connected to steel industries. Further, the company purchased 8 acres out of loan amount and the same property was mortgaged to another bank. The investigation further revealed the role of managing director and other directors in the fund diversion' CBI said.