CBI books Vizag's Kesava Cotton Traders for defrauding SBI of Rs. 10.01 cr

Visakhapatnam: The Central Bureau of Investigation, Visakhapatnam, has registered a case against Kesava Cotton Traders for causing wrongful losses of Rs. 10.01 crore to the State Bank of India. According to the CBI, on 23 February, A. Tarakeshwar Rao, the regional manager of SBI regional office, RBO-1, Brodipet, Guntur, lodged a complaint against Kesava Cotton Traders.

It was alleged that Kesava Cotton Traders started its operations in June 2006 with Innamun Subramanyam as the proprietor. The unit is an associate of Gayatri Cotton Mills where Mr. Subramanyam is a partner. The unit is engaged in cotton ginning and trading. The firm had been banking with Andhra Bank with a total exposure of Rs. 7.50 crore (cash credit limit of Rs. 5 crore and letter of credit limit of Rs. 2.50 crore). The unit requested the State Bank of India, SME branch, Guntur, to take over the limits by sanctioning an FBWC limit of Rs. 7 crore. Accordingly, after a meeting, the bank accorded a sanction of cash credit limit of Rs. 7 crore.

Later, Kesava Cotton Traders was converted into a partnership firm with Innamun Sai Kumar, the son of Innamun Subramanyam, as a partner. A fresh cash credit limit of Rs. 10 crore was sanctioned to the partnership firm out of which Rs. 7 crore was used to close the existing cash credit limit under proprietary firm. The account turned NPA on 30 June 2019 due to continuous irregularities in the account for more than 90 days due to non-payment of interest debited to the CC account. The outstanding credit facilities reached Rs. 10.01 crore and the total dues stood at Rs. 13.42 crore. The value of security available with the bank was Rs. 3.35 crore. The estimated wrongful loss to SBI was Rs.10.01 crore.

It was alleged that the unit availed credit facilities by falsifying and/or fabricating books of accounts or financial statements, withdrew funds from cash credit accounts by submitting false and manipulated stock and book debt statements. The borrower also disposed the hypothecated primary security without the consent of the bank and mis-utilized the sale proceeds.

One of the collateral securities of 4.39 cents land in Macheria, Guntur district, was recently gifted and the valuation of the said property was inflated. The property was purchased by the vendors, who gifted the property to borrower for Rs. 3.00 lakhs per acre. Further, the valuer has taken the land to Rs. 66 lakhs per acre by manipulating the SRO data in the SRO report.

According to the CBI, the borrowing firm and its partners in collusion and connivance with unknown persons caused wrongful loss to SBI to the tune of Rs. 10.01 crore. The CBI registered a case under various sections of the IPC and PC Act 1988 (as amended in 2018).