A consortium was formed with other banks, led by Canara Bank.
It was further alleged that the accused had falsified/ fabricated of books of accounts, fudged stock statements, tampered with balance sheets, and engaged in round tripping of funds. Canara Bank also alleged that the accused misappropriated its funds, diverted the loan amount sanctioned by the consortium and caused a loss of around Rs 7,926.01 crore to Canara Bank and other member banks. The account had become NPA and the fraud was reported, said CBI
without disclosing the names of those arrested.
Searches were conducted at the premises of private company/other accused at Hyderabad
and Guntur, which led to recovery of incriminating documents.
The second case was registered against a private company in Chennai, along with its chairman, directors, and others on a complaint by State Bank of India.
It was alleged that the borrower company represented by its Chairman & Directors availed Credit limits of about Rs 310 crore from SBI.
The loans amounts were said to have been diverted to related parties. The account became NPA and was declared a fraud. An alleged loss of Rs 313.79 crore (approx) was caused to SBI.
Searches conducted at the premises of the accused in Chennai
led to recovery of incriminating documents, said CBI.
Later, Canara Bank issued a statement to the exchanges, titled 'Clarification in respect of news regarding alleged fraud by Mis Transstroy India Ltd - Financial implication for Canara Bank - Rs 678.28 crore - Fraud reported to RBI on 10.02.2020 and 100 per cent provisions made. It clarified the following:
"...It is clarified that the company was enjoying limits from various Banks under Multiple Banking Arrangement from 2001. Subsequently, a Consortium with Canara Bank as Leader with 13 other Banks was formed in 2013 and the total limit sanctioned was Rs 4765.70 crore and the share of Canara Bank is only Rs 678.28 crore. The account was declared as fraud and reported to RBI on 10.02.2020. Canara Bank has made 100 per cent provision for this account as per the prescribed prudential norms. The company has already been declared as wilful defaulter on 26.12.2018 by our bank. Out of Rs 7926.01 crore fraud amount appearing in the press note, the amount of lending made by all the 14 Consortium members is Rs 4765.70 crore. Remaining amount was lent under Multiple Banking Arrangement. Out of this, exposure of Canara Bank is Rs 678.28 crore only. The case was referred to NCLT and was admitted by NCLT, Hyderabad, on 10.10.2018. The Company is under the process of liquidation."