The Central Bureau of Investigation has booked Ludhiana-based SEL Textiles Limited and its directors for allegedly cheating a consortium of 10 banks to the tune of ₹1,530.99 crore. The company dealt with a Canadian firm which figured in the Panama Paper leaks.
The company directors named in the case are Ram Saran Saluja, Neeraj Saluja and Dhiraj Saluja. The third accused operates from abroad. Unknown bank officials and the chartered accountants involved in maintaining the company’s books of accounts are also under the scanner.
It is suspected that over ₹850 crore was diverted on various pretexts.
The case has been registered on a complaint from the Central Bank of India, which was part of the consortium that extended credit facilities to the company. It is a 100% subsidiary of SEL Manufacturing Company Limited and has five factories located in Punjab, Haryana and Rajasthan.
Classified as NPA
Owing to the continuous delay in repayments, the loan accounts were classified as non-performing assets (NPA) in March 2014. The company requested for restructuring of loans, which was allowed. However, its financials further deteriorated. The accounts again turned NPA in February 2016.
A comprehensive audit was ordered into the company’s finances. The report submitted in January 2017 highlighted serious irregularities. It indicated that the company had diverted huge funds and also indulged in other wrongful acts.
As it turned out, the company’s borrowing was grossly disproportionate to the owned funds. There were delays in the realisation of sale proceeds from a few select parties leading to continuous increase in the levels of sundry debts from a few big customers. They all appeared to be related entities, acting in concert or controlled directly/indirectly by the company.
Equipment were also procured from entities that were suspected to be related to the company. Suspicion about over-invoicing was also raised. The funds were also diverted to allegedly buy residential flats in Mumbai without prior approval.
The SEL Manufacturing Co. Limited, the holding company, was to contribute ₹380 crore to the capital towards promoter contribution. However, auditors found that the share contribution was without actual money infusion. It was allegedly facilitated through round-tripping by showing sale/purchase and through adjustment of third-party accounts.
The company dealt with several overseas entities based in Dubai, Canada and Moscow. One Aarti Impex, an exporter of textile products in Canada, was found to be allegedly linked to the Panama Paper leaks.
Aarti Impex, whose director has been identified as Sandeep Gupta, was registered in the Panama Islands. It had branches in Bolivia and Colombia and represented spinners from India, Pakistan, Indonesia, Turkey, China and other countries, the FIR said.
The banks have identified at least 15 firms with which the accused company had suspicious business dealings. In some cases, the vehicles shown to have been used for ferrying the goods did not exist.
