The bank said PAL repaid short-term loans of Rs 125 crore that it procured during 2011, but according to officials that this could be a ploy to gain the bank's confidence for passing bigger loans. Some other banks had lodged cases earlier. The banks restructured the loans so that the firm could repay it. They were the directors of the firm Parekh Alluminex Ltd at the time.
For this, they submitted minutes of their board meeting (later found to be forged).
PAL tried to show Axis Bank that it had bought aluminium foils for Rs 49 crores from Suryakiran Ferro Alloys Ltd (SFAPL) naming Goragandhi and his wife as its directors.
TMPL produced bills for goods' supply to PAL for encashing the LCs.More news: Juan Martin del Potro gives passionate speech after Indian Wells win
"It is a Rs 290 crore fraud involving a bank".
However, while going through the bills and documents, the Police found the address given for SFAPL in the documents for en cashing a letter of credit worth Rs 50 crores, to be bogus.
PAL used the same MO again in 2013, when it sought LCs for purchasing aluminium foil worth Rs. 70cr from Trisons Metalex Pvt Ltd (TMPL).
But Axis later found no such company nor the transporting company named existed.More news: European Union offers United Kingdom support over Salisbury poisoning
Bhawarlal Bhandari, 46, Premal Goragandhi, 40 and Kamlesh Kanungo, 41, are the directors of various firms and were allegedly involved in the fraud case as the three helped the main accused in taking Rs. 290 crore. He participated in layering and diverting the defrauded sum and acted on instructions of Kanungo, who was controlling all business activities when the alleged fraud took place.
Axis Bank in its complaint had mentioned five other PAL directors- Amitabh Parekh, Rajendra Gothi, Devanshu Desai, Kiran Parikh and Vikram Mordani. This got him the letter of credit to PAL but the money was diverted to Parekh's personal account.
Though the major exposure belongs to Indian Overseas Bank (IOB) of Rs 2,000 crore, it was only after the criminal complaint filed by Axis Bank of Rs 250 crore in 2017, the EOW conducted a detailed investigation and last week arrested three directors. The company is now facing bankruptcy proceedings in the National Company Law Tribunal where a petition has been lodged.More news: Lowes Companies Inc (NYSE:LOW) Shorted Shares Decreased By 8.69%