DNA EXCLUSIVE: Rs 80 crore loss to Exim Bank; CBI registers case

Economic Offences Wing of Central Bureau of Investigation (CBI) on Wednesday registered a case of cheating and criminal conspiracy against a Grant Road-based company for allegedly causing wrongful loss of Rs 80 crore to Export Import Bank of India (Exim Bank) at Cuffe Parade.

The case has been registered against M/s Parekh Aluminex Ltd (PAL), Nana Chowk, Grant Road, engaged in the production and sale of aluminium foil containers/rolls etc. The company, at one point in time, was the largest manufacturer and exporter in its segment and had a significant share in the niche market of the UK.

According to the CBI, the bank has alleged that between 2004 and 2015, PAL and other unknown persons entered into a criminal conspiracy with an intent to cheat the Exim Bank in availing foreign currency Pre-cum-Post Shipment Credit (PCPS) and Working Capital Term Loan (WCTL) limit. PAL got sanctioned and released foreign currency PCPS of $2 million in August 2004 and got it renewed time to time with the latest renewal in May 2011 for Rs 13 crore.

The WCTL of Rs 50 crore was sanctioned to the company on July 2010 and was renewed time to time with reduction finally to Rs 45 crore in December 2012. After availing the above-mentioned limits, the company allegedly diverted the funds and caused wrongful loss to the tune of Rs 80.39 crore to Exim Bank.

Speaking about the alleged cheating, a CBI officer said, "The credit facilities were given to the company for the purpose of business operations. However, the company instead of utilising the funds for which the credit facilities were granted, utilised the funds for granting loans to other entities without any security, without documents, that too to sectors which are not even remotely related to the core business activity of the company."

He added falsification of accounts was resorted to by the company by manipulating the position of Letter of Credits outstanding in the monthly stock statements thereby overstating the drawing power in the cash credit account.

"There was a sudden decline in stocks and receivables (both by around 90 per cent during December 2012). This huge drop in stock and receivables as without any proper justification and reasons," the official said.

KNOW THE CASE

• Parekh Aluminex on Grant Road caused Rs 80 crore loss to Exim Bank.
   
• The firm availed foreign currency PCPS with conspiracy motive.
   
• After availing PCPS, it diverted funds causing the bank wrongful loss.