The CBI has registered a case against Simbhaoli Sugars Limited, its Chairman Gurmit Singh Mann, Deputy Managing Director Gurpal Singh and others in connection with an alleged bank loan fraud of Rs 97.85 crore.
Simbhaoli Sugars Limited is one of the largest sugar mills in the country.
The company's Chief Executive Officer G S C Rao, CFO Sanjay Tapriya, Executive Director Gursimran Kaur Mann and five non-executive directors have also been booked by the agency.
Gurpal Singh is the son-in-law of Punjab Chief Minister Amrinder Singh.
The CBI today carried out searches at eight premises including residences of the directors, factory, corporate office and registered office of the company in Delhi, Hapur and Noida, CBI spokesperson Abhishek Dayal said.
The probe focuses on two loans -- Rs 97.85 crore which was declared fraud in 2015 and another corporate loan of Rs 110 crore which was used to repay the previous loan.
The second loan was declared NPA on November 29, 2016, nearly 20 days after scrapping of Rs 1,000 and old Rs 500 notes was announced, according to the CBI FIR.
The bank was allegedly cheated to the tune of Rs 97.85 crore, but the loss incurred by the bank is Rs 109.08 crore, the FIR read.
The lender, Oriental Bank of Commerce, complained to the CBI on November 17, 2017, but the agency registered a case of criminal conspiracy and cheating under the Prevention of Corruption Act on February 22.
According to the FIR, OBC sanctioned a loan of Rs 148.60 crore to the company in 2011.
The loan was sanctioned for financing 5,762 sugarcane farmers based on a tie-up agreement under an RBI scheme for supplying sugar produce to the company from January 25, 2012 to March 13, 2012.
The loan money was "dishonestly and fraudulently diverted by the company for its own needs", Dayal said.
According to an MoU, out of the price to be paid by Simbhaoli Sugars Limited to the farmers, loan liabilities were to be adjusted and the remaining amount was to be paid by the company to the growers, according to the FIR.
The account turned NPA on March 31, 2015 and was declared alleged fraud by the bank to RBI on May 13, 2015 for an amount of Rs 97.85 crore.
OBC alleged that in addition to the existing NPA, the bank, under multiple banking arrangements, sanctioned another corporate loan of Rs 110 crore to the company on January 28, 2015 to pay its outstanding loan of Rs 97.85 crore.
The bank adjusted the total liability of Rs 112.94 crore towards the company by way of deposit of the new corporate loan.?
"The corporate loan, too, turned NPA on November 29, 2016," Dayal said.