Over the past five years, they have been accused of defrauding banks out of loans amounting to thousands of crores of rupees.

Over the past five years, they have been accused of defrauding banks out of loans amounting to thousands of crores of rupees.

About 100 companies specializing in agricultural products have been investigated by the Central Bureau of Investigation (CBI) over the past five years on charges of deceiving banks out of loans amounting to thousands of crores of rupees. This year so far, more than two dozen companies trading in items ranging from rice and spices to petroleum have been charged with bank fraud involving over ₹1,400 crore.

One of the main cases recorded earlier this year concerns SA Rawther Spices Private Limited, which exports and imports spices and coffee. The company has taken credit facilities from Jammu & Kashmir Bank. As alleged, the company and its officials caused a loss of ₹352.72 crore to the bank. He failed to repay the loan on a regular basis and the account was declared a non-performing asset in September 2017.

Among others, Shree Basant Oils Limited was charged with bank fraud to the tune of ₹124 crore, and Saurav (India) Private Limited allegedly caused an unjustified loss of around ₹126 crore to its lenders.

Also last year, several lawsuits were filed against business groups trading in agricultural products. One such case involved Shri Jalaram Rice Industries in an alleged ₹114 crore bank fraud case.

On December 31, 2021, the CBI had booked Shakti Bhog Foods Limited and others for allegedly deceiving a consortium of 10 banks out of ₹3,269.42 crore. Among those named in the FIR are the company’s chief executive, Kewal Krishan Kumar, and directors Siddharth Kumar and Sunanda Kumar. The company is engaged in the manufacture and sale of items like wheat flour (under the well-known brand name Shakti Bhog), rice, biscuits and biscuits in the northern states. In other states, it has third-party links with various entities.

“In all of these cases, the lending banks have alleged misappropriation of funds through various modus operandi. Front companies are used to funnel the misappropriated money, which is often back and forth and invested in related entities. “In addition, properties are acquired by the accused persons using the funds. In order to obtain more credit facilities, companies often inflate their net worth,” an agency official said.