CBI, Gujarat ATS arrest 3 promoters of Diamond Power in Rs2,654 crore fraud case

Ahmedabad: In a joint operation, the Central Bureau of Investigation (CBI) and the Gujarat Anti Terrorist Squad (ATS) have arrested three promoters of Vadodara-based Diamond Power Infrastructure Ltd (DPIL) accused of defrauding a consortium of banks to the tune of Rs2,654 crore, officials said on Wednesday.

The three promoters—S.N. Bhatnagar and his sons Amit and Sumit—were held from a hotel in Udaipur last night, they said. DPIL manufactures electric cables and other electrical equipment.

“The CBI had sought our help in nabbing the Bhatnagar trio. Based on a tip-off that they were hiding in a hotel, a joint team of the Gujarat ATS and the CBI conducted a raid in Udaipur in Rajasthan last night and held them,” a senior ATS official.

The CBI had filed a complaint against the promoters two weeks ago. The Bhatnagars had remained out of the clutches of the CBI, the Enforcement Directorate (ED) and the Income Tax Department despite the agencies conducting raids at the DPIL’s facilities in Vadodara.

According to the CBI, the DPIL had fraudulently availed credit facilities from a consortium of 11 banks—both public and private—from 2008, leading to outstanding debt of Rs2,654.40 crore as of 29 June 2016. It was declared a non-performing asset in 2016-17.

The company allegedly submitted false stock statements to the lead bank by treating ‘receivables more than 180 days’ (non-current assets) as ‘less than 180 days’ (current assets) to get more drawing power in the cash credit accounts.

The CBI alleged that the DPIL extensively utilised cash credit limits for obtaining a large number of letters of credit, and many of them could not be honoured by the company and were thus “forced charged” on the credit limit.

Bank of India’s exposure to the company is Rs670.51 crore, Bank of Baroda’s exposure is Rs348.99 crore and that of ICICI Bank is Rs279.46 crore, the CBI said in an FIR.