Oriental Bank of Commerce Slumps 12% after Two Fraud Cases

February 28, 2018

On Tuesday, it was observed that the Oriental Bank of Commerce declined over 10 per cent. This was due to the back- to -back fraud cases that took place recently. The bank has approached the CBI with a complaint of Rs 390 crore frauds against Delhi-based jewellery exporter Dwarka Das Seth International.

CBI has filed FIR against the Ghaziabad-based Simbhaoli Sugars. It is accused of causing a loss of about Rs 110 crore to the state-owned bank, Oriental Bank of Commerce.

On this news, the stock reacted sharply and thus it fell by 10.02 per cent to Rs 95.15 on the BSE.

Simbhaoli Sugars is a technology company with a business mix that spans refined (sulpherless) sugar, specialty sugars, quality liquor, co-generated power, extra neutral alcohol (ENA), ethanol, bio-manure and technology consultancy.

In a complaint, Bank has stated that it had sanctioned a loan of Rs 148.60 crore to Simbhaoli Sugars in 2011 under an RBI scheme for financing individual, joint liability groups (JLG) and self help groups (SHGs) of 5,762 sugarcane farmers.

However, now the Bank claims that the company dishonestly and fraudulently diverted the loan for its own needs.

CBI is now probing this case of fraud at OBC allegedly involving Punjab Chief Minister Captain Amarinder Singh’s son-in-law. As per the complaint made by lender, a loan of Rs 148.60 crore was given to Simbhaoli Sugars for financing 5,762 sugarcane farmers. However, this amount is diverted by the company for its own needs.

The case is filled against case against the company as well as against its Chairman and Managing Director Gurmit Singh Mann.

Apart from him, Deputy Managing Director Gurpal Singh is also charged. He is also the son-in-law of Punjab CM Amarinder Singh. In connection with an alleged bank loan fraud of Rs 109 crore at the public sector bank, these directors are charged. In a span of three days, it is the second FIR that the CBI has filed on the complaint of OBC.

As per the complaint registered by the bank against the company and its directors, the out of the price to be paid by Simbhaoli Sugars Limited to the farmers, loan liabilities were to be adjusted.

About Neha Singh

I am a content writer at Money Classic Research. I am first a Fashionista and then a writer. Born and brought up in the heart of India. I am better known for my creativity and passionate nature. I have expertly written content for magazines as well as for blogs.
By: Neha Singh

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