Hyderabad firm under scanner, bank-fraud worth Rs.23,500cr uncovered in 2018
Yet another bank fraud has emerged, the third case to be reported in five days. The CBI has now registered a case against Hyderabad-based Totem Infrastructure Ltd for duping lenders of Rs. 1,394.43cr. Totem secured loans from a consortium of eight banks on the basis of forged documents. CBI took action after Union Bank of India lodged a complaint alleging its directors are "untraceable."
What is this firm? What does it do?
Sources said Totem was engaged in infrastructure projects and "took subcontracts from Larsen and Toubro Ltd, Ircon International Ltd and similar companies. CBI added that "the said private company based at Banjara Hills, Hyderabad, was in the business of EPC (engineering procurement and construction) contractor engaged in road projects, water works, building structures and also undertook works as a sub contractor to various companies."
How did they dupe the banks?
Not many details are available about the alleged fraud, but according to Union Bank, "The company had diverted funds by opening accounts outside the consortium and through payments of wages by showing excess expenditure and inflated stocks. "The entire sale proceeds were not allegedly routed through the dealing branches of consortium banks." Union Bank says Totem cheated it of Rs. 313.84cr.
As of 2015, Totem owed over Rs. 400cr in taxes
Totem had figured in the Income Tax Department's 2015 list of the biggest defaulters, with outstanding tax of over Rs. 400cr. The same year, it announced rewards of up to Rs. 15L for information about the "untraceable" promoters. However, CBI has now managed to locate Tottempudi Salalith and his wife Tottempudi Kavita at their new residence in Hyderabad. Searches were carried out.
Lookout circulars now issued against promoters
The investigating agency has now issued lookout circulars against promoters and directors Salalith and Kavita to prevent them from leaving the country. This case comes two days after a similar scam by Chennai-based Kanishk Gold Pvt Ltd came to light.
At least seven cases of bank fraud discovered till now
In 2018, at least seven bank frauds worth Rs. 23,500cr have come to light: the Nirav Modi fraud (Rs. 12,650cr), Parekh Aluminium Ltd (Rs. 4,000cr), Rotomac Pens (Rs. 3,695cr), Totem (Rs. 1,394cr), Kanishk (Rs. 824cr), RP Infosystems (Rs. 515cr) and Dwarka Das Seth (Rs. 390cr). Several banks, including SBI, Axis, Bank of Baroda, Union Bank and Oriental Bank of Commerce, have been hit.
