Trichy: The Banking Security and Fraud Cell (BS&FC) of the Central Bureau of Investigation (CBI), Bengaluru, has begun investigations into a loan fraud case against Patel Group — a firm involved in timber trade in Trichy, Dindigul and Tenkasi — for allegedly cheating Corporation Bank of Rs 415.20 crore by taking loans on the basis of inflated value of properties given as collateral security.The CBI registered an FIR on September 26 against 27 members of the Patel family, 15 firms of Prabhat Group — which is often referred to as Patel Group in the bank records — and MN Lingaraj and Nagappan, empanelled valuers of the bank, based on a complaint from Pramod Kumar Reddy Kancharla, assistant general manager, Corporation Bank Zonal Office, Trichy.
Reddy in his complaint said that an internal probe by the bank has brought out collusion of the borrowers with the valuers to inflate property values to avail loans from Trichy, Dindigul and Tenkasi branches of the Corporation Bank, and illegal diversion of funds through various group accounts. Between 2009 and 2014, the group had availed loans for Rs 829 crore against securities from the bank. It was alleged that almost all the borrowers involved in the offence transferred the proceeds of agriculture loans taken in individual names to business loan account, where the borrower and the family members were partners against the rules and regulations. Besides, the firm also indulged in internal transfers of money between the different firms of Prabhat Group to deliberately show transactions.
The case was registered for criminal conspiracy, criminal breach of trust, cheating, forgery for purpose of cheating and using a forged document as genuine.While demanding action against those named in the complaint, Reddy also asked the CBI to investigate if there was any role of public servants in the cheating. Established in late 1980s, Patel Timbers expanded its business of timber trading manifold opening branches in Dindigul and Tenkasi besides functioning with several branches in Trichy alone.When contacted, the officials of the Corporation Bank in Trichy declined to comment on the issue.