Simbhaoli Sugar plunges 20% after CBI registers case; OBC touches 52-week low

Since the Rs 11,400 crore PNB fraud case has come into light, the CBI has registered seven cases in last 10 days from other banks.

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Updated: Mon, Feb 26, 2018
01:44 pm

Mumbai, ZeeBiz WebDesk

After the PNB fraud case, the Central Bureau Investigation (CBI) has filed a case against a sugar company, Simbhaoli Sugar Limited, for allegedly cheating Oriental Bank of Commerce (OBC).

The BSE-listed Simbhaoli Sugar Limited reportedly carried out a fradulent transactions of Rs 109 crore with the OBC in the year 2011 for financing sugarcane farmers.

The CBI has registered case against Simbhaoli's Chairman Gurmit Singh Mann, Deputy Managing Director Gurpal Singh and others in connection with an alleged bank loan fraud of Rs 97.85 crore, reported PTI.

The company's chief executive officer GSC Rao, chief financial officer Sanjay Tapriya, Executive Director Gursimran Kaur Mann and five non-executive directors have also been booked by CBI, the report said.

It may be noted that Gurpal Singh is the son-in-law of Punjab Chief Minister Amrinder Singh.

The fraud of Rs 97.85 crore was announced in 2015, but the loss incurred by the OBC is reportedly worth Rs 109.08 crore.

OBC sanctioned loan of Rs 148.60 crore to Simbhaoli in 2011 for financing 5,762 sugarcane farmers based on a tie-up agreement under an RBI scheme for supplying sugar produce to the company from January 25, 2012 to March 13, 2012.

The FIR, which was was reviewed by Mint, stated that Simbhaoli dishonestly and fraudulently diverted the loan amount for its own needs. The FIR further stated that OBC sanctioned another corporate loan of Rs 110 crore to Simbhaoli on January 28, 2015 for recovering outstanding debt of Rs 97.85 crore.

The benchmark stock exchange has soughted clarification from Simbhaoli Sugars in regards to the news reported by Mint. The reply from the company is awaited.

Meanwhile, investors have already started to remove their money from Simbhaoli, as the company's share price tumbled by nearly 20% by touching 52-week low of Rs 13.50 per piece since the beginning of trading sesssion on Monday.

At 1352 hours, Simbhaoli was trading at Rs 14.30 per piece down by 15.13% on the BSE.

Also, this would be the second FIR registered by CBI in three days on the complaint of OBC.

Earlier, OBC reportedly informed CBI for Rs 390 crore fraud committed by Karol Bagh based Dwarka Das Seth International diamond trader Sabhya Seth and associates.

The exchange has sought clarification with OBC in regards to the Delhi Diamond exporter. The reply is awaited.

Meanwhile, OBC's share price has touched a 52-week low of Rs 92.50 per piece on the BSE--a plunge of 13% on the exchange. However, at around 1352 hours, the share price was trading at Rs 95.05 per piece down by Rs 10.70 or 10.12%.

Since the Rs 11,400 crore PNB fraud case has come into light, the CBI has registered seven cases in last 10 days, including other banks like State Bank of India, OBC, Bank of Maharashtra and Telangana Grameena Bank.