The state-run lender filed a complaint with the Central Bureau of Investigation (CBI) on April 11, 2018, against Era Infra Engineering Ltd in view of irregularities reported in their accounts with the bank. "The account was categorised as non-performing asset since July 1, 2013 onwards", the UCO Bank said in a regulatory filing on Monday.
Searches were conducted in 10 places, including eight in Delhi and two in Mumbai, at the office premises of the companies, chartered accountants and the residence of the accused. Bombay Stock Exchange or BSE has sought clarification from UCO Bank on this matter, According to Reuters, CBI said officials at the bank had colluded with private infrastructure firm Era Engineering Infra, and investment banking firm Altius Finserve Pvt to siphon bank loans.
It was alleged that the accused persons in pursuance of criminal conspiracy defrauded the UCO Bank to the tune of Rs 621 crore (approx) by diversion and siphoning of the bank loans, they said. Kaul, who was the CMD of a Kolkata-based bank between 2010 and 2015, allegedly facilitated the accused company in obtaining the loan. Another charge is that the loan was secured by producing false end-use certificates issued by CAs and by fabricating of business data.
In its complaint, the bank said two loans were issued to the company in 2010, of Rs 2 billion and Rs 4.5 billion. And, the money was not utilised for the sanctioned goal, CBI has alleged. The Rs 2 billion was issued for repayment of higher cost debt to Central Bank of India, Punjab National Bank (PNB), and IFCI.
The bank's share price fell 18 per cent in morning trade. UCO Bank was trading 8 per cent lower at Rs 20.60 against 0.19 per cent decline in the S&P BSE Sensex.