Forensic Audit Reveals Series of Financial Irregularities
The Central Bureau of Investigation (CBI) intensifies its crackdown on financial malfeasance, initiating probes and conducting searches in Mumbai linked to Unity Infraprojects Ltd. The company, along with key individuals including its former CMD Kishore Krishnarao Avarsekar, stands accused of orchestrating a massive bank fraud.
Mumbai Searches Underway
Prompted by a complaint from the State Bank of India (SBI), the CBI has embarked on a mission to unravel the specifics of the alleged scam. The SBI points fingers at its Commercial Branch in Mumbai, suggesting that malicious activities took place there. The accused stand charged with illicitly channeling the bank’s funds through sham transactions, intentionally manipulating their financial books to defraud the bank.
Diving Deep into Financial Anomalies
Unity Infraprojects Ltd, a 44-year-old infrastructure giant, had borrowed an astounding amount exceeding ₹ 3,800 crore against both movable and immovable assets, supported by personal and corporate guarantees. However, the account turned non-performing by June 24, 2014. It took another half-decade for the firm to be officially declared fraudulent, post a detailed forensic audit. The audit by BDO India LLP unveiled a network of fake transactions, unexplained financial adjustments, fund diversions via non-consortium accounts, and more. Strikingly, it also highlighted suspicious excessive payouts, suggesting attempts to drain bank funds and the dubious use of borrowed capital in related party dealings.
Legal Implications on the Horizon
Drawing on these findings, the CBI has registered cases against Unity Infraprojects Ltd, its former chairman, past directors, and executives. They face potential charges under IPC sections, which include criminal conspiracy and cheating. The Prevention of Corruption Act will also play a pivotal role in the unfolding legal drama.
This incident underlines the significance of robust internal controls and the necessity for regular financial audits in the corporate sector. As the CBI digs deeper into this financial quagmire, it sends a clear message about the agency’s relentless pursuit of justice, holding powerful entities accountable. The episode also acts as a stark reminder for banks and financial institutions to remain vigilant and intensify their scrutiny to prevent future mishaps.
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