New Delhi (Agency): A major bank fraud case has come to light with the Central Bureau of Investigation (CBI) registering a case against Kolkata-based Visa Power Ltd for allegedly defrauding a consortium of 14 banks. The total amount involved in this fraud is a staggering Rs 1964 crores.
Visa Power Ltd, a wholly-owned subsidiary of Visa Energy Ventures Ltd., and in turn a wholly-owned subsidiary of Visa Infrastructure, has been working on a domestic coal-based thermal power project with a generation capacity of 1200 MW at Raigarh, Chhattisgarh.
According to the FIR, the company’s Chairman Vishambaran Saran, Chairman and Managing Director Vikas Agarwal, and Joint Managing Director Subrato Trivedi are named as accused in this case.
The borrower company Visa Power, represented by its directors, had sought financial assistance from the Punjab National Bank’s Station Square branch in Bhubaneswar. They presented financial projections and led the bank to believe that the loan would help grow the company’s business. The project was to be executed in two phases of 5600 MW each, and Phase I was financed through a consortium of 14 lenders with PNB as the lead bank, involving a term loan (TL) limit of Rs 1964 crores (Rs 394 sanctioned by PNB).
The FIR details financial irregularities observed in the audited statements of Visa Power Ltd. (VPL). Specifically, a sum of Rs 60.08 crores and Rs 15.60 crores were paid by VPL to Visa Reality Ltd (VRL) as a capital advance in the financial years 2011-12 and 2012-13, respectively. This capital advance was allegedly utilized by VRL for buying equity and preference shares in related parties of VRL and VPL (Visa Minmetal Ltd.). The nature of these transactions indicates an intention to misappropriate bank money by diverting the funds.
The CBI, in its FIR, concluded that the accused persons had “jointly hatched a conspiracy against Public Sector Banks with the intent to cheat banks by diverting/siphoning money” and committed various offenses under the provisions of the Indian Penal Code (IPC).
This development adds to the concerns over the financial integrity within India’s corporate sector, specifically relating to the transparency and honesty of large-scale financial transactions. The case against Visa Power Ltd emphasizes the need for strict scrutiny and due diligence in lending procedures by financial institutions.
The progress of this case and the actions taken by the regulatory authorities will be crucial in setting precedents for financial accountability and transparency. It will also send a strong message to potential wrongdoers in the corporate world, reinforcing the commitment of law enforcement agencies to protect public interest and financial integrity in the country.