teams carried out searches two days after the agency registered an FIR
against some unidentified bank officials, the firm and 13 individuals,
including promoters Udai Jayant Desai, Sujay Udai Desai, Sunil Lal Chand
Verma and Anoop Kumar Wadhera, directors and guarantors of the company.
searches were conducted at 13 places, including the office premises of
the private companies, and at the residential premises of the present
and past directors, guarantors of the company in Mumbai (three places),
Delhi (four places) and Kanpur(six places).
In its FIR filed on
January 19, the agency has framed charges against Frost International
and others for cheating a consortium of 14 banks led by Bank of India to
the tune of Rs 4,061.95 crore Bank of Baroda (BoB), Canara Bank,
Central Bank of India, Andhra Bank, Oriental Bank of Commerce, Punjab
National Bank, Syndicate Bank, Union Bank of India, Indian Overseas
Bank, UCO Bank, Vijaya Bank, Allahabad Bank and United Bank of India are
the other banks in the consortium.
Look Out Circulars (LOC) have
also been issued against all of them at airports and entry-exit points
across India so that they don't leave the country.
As per the
complaint filed by Bank of India's Kanpur branch, Frost International
had been banking with it and other banks in the consortium since 1996.
FIR says in the loans taken from the consortium, BOI has the highest
exposure of Rs 756 crore which the company has not repaid.
stress in the account is observed from January 2018 onwards in the
consortium of 14 banks, when Letters of Credit started devolving with
member banks as export proceeds were not realized, the FIR said.
company could not deposit the overdue amount and account is classified
as NPA (Non Performing Asset) by all the member banks."
consortium later decided a forensic audit and its report dated January 5
last year found that there was a potential diversion of funds by way of
providing unsecured loans to group companies and that there was no
actual export of goods against merchant trade transactions.
also found purchases and sales took place among parties known to each
other and that the majority of payments towards sales were received from
third parties and not from the parties to whom the goods were sold.
company is engaged in trading of multiple agro commodities, minerals
and metals, bullion, polymer, chemical and petroleum products, plastic,
textiles and other items.
It has suppliers across the globe
including Bangladesh, China, Hong Kong, the US and the UAE, West Indies,
Cambodia, Saudi Arabia, Switzerland and Taiwan.
International Ltd registered office is in Bandra Kurla Complex, Mumbai,
its head office and international marketing division is in Hospitality
District, New Delhi and the corporate office is in Kanpur.
company allegedly diverted the banks' fund by giving unsecured loans and
advances to its non-business related parties, the FIR said.
were variations in sales and purchase prices of non-Merchant Trade
transactions and some of the non-Merchant Trading parties were found
non-existent and mismatch in Merchant Trade transactions, with either
port of loading and discharge or mismatch in the date of vessel
"Inordinate time gap has also been observed in some of
the bills of lading date compared to the vessel exit date at the same
port. All these factors indicate that there was no actual export of
goods against the Merchant Trade transactions.
"It was also
alleged that the private company had submitted list of debtors, against
whom it did not initiate any action for recovery of their dues, even
after the outstanding remained for more than 12 months," the FIR said.