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The Central Bureau of Investigation (CBI) has taken into custody Jag Mohan Garg, the Chairman and Managing Director of Tirupati Infraprojects Private Limited, following allegations of a Rs.289.15 crore bank fraud. On Monday, officials revealed that the company stands accused of illicitly diverting loan funds it had procured for a high-end hotel project in West Delhi.
On May 25, 2022, the CBI lodged a First Information Report (FIR) against Tirupati Infraprojects, alleging that the company caused a loss of Rs.289 crore to a coalition of public sector banks headed by the Bank of India through illegal diversion of loan funds. The other banks involved in this consortium are Union Bank of India, Canara Bank, Bank of Baroda, and UCO Bank.
Bank of India has reported that the cumulative loss experienced by the banks exceeded Rs.979 crore as of December 13, 2021, due to mounting arrears. From 2009 to 2014, the bank consortium approved a Rs.300 crore term loan to Tirupati Infraprojects for constructing Hotel Radisson Blu along with commercial spaces in Paschim Vihar, New Delhi.
Financial strains began to surface within the company in 2012. Despite numerous attempts to salvage the account, it was declared a non-performing asset (NPA) in 2014, as stated by the Bank of India in its complaint. The bank accused the company, its promoters, and directors of fraudulent transactions and causing significant loss to the lending banks while gaining wrongfully from their actions.
Bank of India's complaint highlighted that Tirupati Infraprojects had unlawfully entered a sales agreement with third parties, bypassing the consent of lending banks. Furthermore, the company allegedly sold various parts of the hotel-cum-commercial building to different parties without notifying the lending banks, redirecting the obtained funds.
Post FIR registration, the CBI executed a search operation at the accused's premises on May 27 last year, discovering multiple incriminating documents. The CBI spokesperson noted that the investigation process involved examining several witnesses, bank officials, and officials from the borrower company. After Garg's arrest, he was presented before a special CBI court, which ordered his detention under the agency's authority until July 13, according to officials.
The arrest of Tirupati Infraprojects' CMD reveals a substantial, meticulously planned bank fraud. The ongoing investigation by the CBI is anticipated to shed more light on the matter, reinforcing the need for robust, transparent banking procedures to prevent such fraudulent activities in the future.
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