The Central Bureau of Investigation (CBI) has lodged an FIR against KPR Cotton and Oil Mills Pvt Ltd, its directors and others for cheating State Bank of India to the tune of Rs 4 crore.
The SBI lodged a complaint alleging that KPR Cotton and Oil Mills Pvt Ltd, Managing Director Kallam Peri Reddy, Director Kallam Lakshmi Devi, Guarantor Jakkireddy Sivamma, Panel advocates J. Nageswara Rao and K.N.M. Kishore, Panel valuer A.S.R. Murthy, K. Venkateswara Rao, and others defrauded the bank.
The CBI said that KPR Cotton and Oil Mills Pvt Ltd was incorporated in 2008 and in May 2010, Managing Director Peri Reddy, and Director Lakshmi Devi approached SBI, Guntur Main Branch to avail credit facilities for cotton ginning and lint trading activity.
The branch processed the loan proposal and sanctioned a cash credit limit of Rs 3.90 crore, and it was enhanced to Rs 4.25 crore in 2011.
“In order to secure the credit facilities, Kallam Peri Reddy arranged to offer immovable properties held in his name and in the name of his sister, Jakkireddy Sivamma. The business ran smoothly for some time, but eventually, the sale proceeds were not routed through their account. Furthermore, the amounts were diverted to other accounts held in the name of group firms and related parties, instead of being routed through their cash credit account. Due to non-payment of interest and non-routing of sale proceeds, the account became an NPA in 2013,” said the official.
The loan account was declared as fraud in 2019. When bank officials visited the unit for inspection, all the stocks were not available for verification, and the borrowers were uncooperative. They ceased business activities and did not route the sale proceeds through the designated loan accounts, diverting the amounts instead.
“On initiation of recovery proceedings under the SARFAESI Act, it was found that the property was disputed and the lands mortgaged exceeded the available land in the Survey Numbers, as per government records. The house construction plan layout was not completed, and the names and boundaries mentioned in the title deed did not match. The parties involved in the title deeds created documents with sub-divisions of survey numbers, even though the government did not divide the land into sub-divisions in the said survey numbers. Reddy and his relatives, in connivance with the vendors of the respective properties, created false documents for land that does not exist, thereby cheating the bank by submitting fraudulent title deeds,” said the CBI.
According to the Bank’s guidelines, panel advocates Nageswara Rao and Kishore were required to verify government records, the genuineness of the title deeds, layout permissions, and the nature of land demarcation with boundaries, among other things, but failed to do so.
Panel valuers Murthy and Venkateswara Rao were required to identify the property by visiting the area and submit the estimated value but they also failed to do so.
“We have now lodged an FIR in this connection and are looking into the matter,” said the official.
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