Another banking scam worth Rs 3.9 billion in Delhi, CBI registers case


After the Rs 11,400 crore PNB scam and Rs 3,600 crore fraud by Rotomac Pens owner, another banking scam worth Rs 3.9 billion has emerged prompting the CBI to register a case against a Delhi-based jeweller.

The latest banking fraud involves another government-owned bank, Oriental Bank of Commerce, which had alleged that Dwarka Das Seth International cheated it with the help of some of its officials, using Letters of Credit (LCs). These LCs were availed during 2007 and 2012.

Nirav Modi and Mehul Choksi had used the similar methods to defraud PNB of Rs 11,400 crore (114 billion).

The CBI has named Dwarka Das Seth International, its associate concern Dwarka Das Seth SEZ India Incorporation, proprietor Sabhya Seth and directors Reeta Seth, Krishna Kumar Singh, Ravi Kumar Singh and unknown bank officials in the FIR.

What’s surprising is that the bank had lodged its complaint on 16 August, 2017. It took the federal probe agency seven months to act on the bank’s complaint. A report by The Hindu said that one Sabhya Seth had orchestrated an elaborate plan for duping the bank. It has also named one Trade Chartered Bank for allegedly issuing LCs without the request of foreign companies that made purchases from the accused.

The complaint by OBC said, “The borrowers were utilising this facility for discounting of bills, under letters of credit established by Dubai Bank Kenya, Soleil Chartered Bank, Trade Chartered Bank, TF Bank Kontrakt Inc, Century Bank Corp LCC, etc.” The jewellery firm did not repay loans on time and demanded extension of the repayment window due to poor business conditions. “Now, for the last 10 months, the customer is not responding and he and his family is not available at the address in the bank records,” Business Standard quoted the bank’s complaint.

According to the complaint, the OBC had made several attempts to recover its dues from the jewellery firm but failed miserably. The bank had also approached the buyers, including Devi Jewells, Mannat FZE and PlatDiam International, but did not get a response. It then discovered that some companies had been floated by the accused to execute the fraud. One such entity, Freya Trading Co., allegedly controlled by Mr. Seth, was shown as a major customer of Dwarka Das International with its dues standing at about Rs 105.44 crore.

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