Union Bank of India Fraud Case; CBI Files 3 Chargesheets in Rs 150 Crore Fraud

Officials from the Central Bureau of Investigation (CIBI) announced on Thursday that they have filed chargesheets in three separate cases of bank fraud totalling Rs 150 crore. CBI had filed three separate cases in response to Union Bank of India complaints alleging that private companies and their respective directors and public servants had defrauded the bank to the tune of Rs.149.89 crore.

Borrowers of private companies conspired with Union Bank of India public servants to commit the fraud by opening LCs without processing, appraisal, assessment, internal rating, regular sanction from the competent authority, or the creation of a mortgage.

Fraud Details

During the investigation, it was discovered that borrower companies allegedly submitted false and fabricated tax invoices, bills of exchange, and forged lorry receipts while discounting LCs from various banks in collusion with fake suppliers. It was alleged that the Chairman of a Group of Companies played a key role in arranging for all three borrowers to obtain credit from Union Bank of India by submitting false and fabricated financial data through one of his employees.

It was also alleged that the accused appointed his employees as Directors in various name-brand supplier companies, using them to submit false and fabricated tax invoices, bills of exchange, and forged lorry receipts, as well as misappropriate loan proceeds through his employees. As a result, he has been charged in the aforementioned cases.

Details of Chargesheets

The first case was filed on June 29, 2019. On the allegations of bank fraud of Rs.56.98 crore, a chargesheet was filed against 13 accused, including private companies and their directors, financial consultants, then DGM/Regional Head, then GM/Zonal Head and others.

The second case was also filed on June 29, 2019. A chargesheet was filed in this case against 16 defendants, including private companies and their directors, financial consultants, the Chairman of the Group of Companies, then DGM/Regional Head, GM/Zonal Head, and others, alleging bank fraud totaling Rs.50 crore.

On March 9, 2020, a chargesheet was filed against 16 defendants, including private companies and their directors, financial consultants, the chairman of a group of companies, then Regional Head , GM, and others, alleging bank fraud totaling Rs.42.91 crore.

The public is reminded that the above conclusions are based on the CBI's investigation and evidence gathered. The accused is presumed innocent under Indian law until their guilt is finally established after a fair trial, the CBI statement said.

Awards

On the other hand, at the Apex India HR & Business Excellence Awards 2020, Union Bank of India won two major awards: "Best Strategy in HR 2020" and the prestigious "HR Oriented CEO Award 2020" given to Bank's MD&CEO, Rajkiran Rai G.

Shares of the Bank is seen tradeing at Rs 37.90, up 3.55% on NSE at 11.43 a.m IST. It touched an intra-day high of Rs 38.60 and a low of Rs 36.15 during the trade.