Loan fraud case: Hyderabad court awards ex-PNB AGM, 3 others 5-year jail term
During the relevant period, the accused had opened four letters of credit (LCs), and the conditions in the LCs were not uniform
By Newsmeter Network Published on 10 May 2023 2:42 AM GMT
New Delhi: Special Judge for CBI cases in Hyderabad has sentenced former Assistant General Manager (AGM) of Punjab National Bank (PNB) RP Garg along with three others to five years of rigorous imprisonment and a fine of Rs. 75,000 each in a loan fraud case.
The case was registered by the Central Bureau of Investigation (CBI) on February 19, 2016, against Sheetal Refineries Limited and its Directors for allegedly committing bank fraud and causing a loss of Rs. 53.82 crore to PNB.
The accused had availed credit facilities from PNB Large Corporate Branch, Hyderabad, and presented false statements, documents, and information to the bank, including false stock statements, audited balance sheets, and share application money.
During the relevant period, the accused had opened four letters of credit (LCs), and the conditions in the LCs were not uniform. The accused also presented false information, which resulted in excess payment by the bank to the borrower.
Garg, who was then AGM, had not checked the difference in the amount of invoices and confirmation letters, and he had not imposed the condition to transport goods through IBA-approved transporters. He had also allowed the accused to submit lorry receipts where the transporter was not on the approved list of IBA and amended LC terms and conditions without the approval of the sanctioning authority, thereby exceeding the delegated powers.
After the investigation, a charge sheet was filed against six accused, including Garg and Sheetal Refineries Limited and its Managing Director, before the designated court in Hyderabad on September 23, 2016. The case against the then CMD of Sheetal Refineries Limited was abated by the trial court as he had passed away.
The trial court found the accused guilty and convicted them. In addition to the five-year prison sentence, a fine of Rs. 2 lakh was also imposed on the private company.
In its press release, the CBI stated that this verdict serves as a warning to others who may try to defraud banks and financial institutions, emphasizing the need for honesty and transparency in business dealings.
The agency has been cracking down on financial fraud and corruption cases in recent years, and this conviction is a significant step towards ensuring that those who commit such crimes are brought to justice.
