Simbhaoli Sugars shares slump 16% on loan default case

Elias Hubbard
March 28, 2018

Shares of Simbhaoli Sugars plummeted almost 16 per cent today as CBI registered a case against the company, its chairman Gurmit Singh Mann, deputy MD Gurpal Singh and others in connection with an alleged bank loan fraud of Rs 97.85 crore.

The fraud of Rs 97.85 crore was announced in 2015, but the loss incurred by the OBC is reportedly worth Rs 109.08 crore.

Besides, Gurpal Singh, the CBI has booked 12 others including Simbhaoli Sugars' chairman Gurmit Singh Mann, CEO GSC Rao, CFO Sanjay Tapriya, executive director Gursimran Kaur Mann and other company officials along with some unknown bank officials. Two big cases in three days were registered by the CBI on the complaints from the Oriental Bank of Commerce against Simbhaoli Sugars and Dwarka Das Seth.

According to the CBI, the OBC bank gave Simbhaoli Sugars Limited a Rs 148 crore loan to finance 5,762 sugarcane farmers based on a tie-up agreement under an RBI scheme for supplying sugar produce to the company from January 25, 2012, to March 13, 2012.

The account was declared NPA on March 31, 2015. Most of these cases relate to conspiracy and cheating, and some involve employees of the bank.

Mumbai: Simbhaoli Sugars has tanked 20% to Rs 13.50, also its record low on the BSE in intra-day trade, after media report suggested that the Central Bureau of Investigation (CBI) filed Rs 970 million loan default case against the company. The bank and CBI have claimed that Gurpal Singh is Deputy MD of the company while Simbhaoli's website claims he is a Director. The company transferred diverted the funds from the Escrow account to other accounts maintained by it with SBI, Punjab National Bank and UCO Bank through RTGS.

CBI in its FIR has alleged that the bank in January 2015 issued another corporate loan of Rs. 110 crore to the company to repay the previous loan of Rs. 98 crore.

The corporate loan, too, turned NPA on November 29, 2016, in the aftermath of Prime Minister Narendra Modi's famous demonetisation move resulting in its first outstanding loan of Rs 97.85 crore (as alleged fraud) and the fresh corporate loan of Rs 109.08 crore (as fresh outstanding).

Other reports by Click Lancashire

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