State-run Canara Bank on December 19 said its exposure to Transstroy India Ltd is over Rs 678 crore under a consortium lending arrangement and the borrower was declared as a wilful defaulter earlier in 2018. The company is under the process of liquidation, it said.
In a clarification, Canara Bank said the bank's exposure to the Transstroy India is of Rs 678.28 crore contrary to news claiming it to be an alleged fraud of Rs 7,926 crore. "In this regard, 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 4,765.70 crore and the share of Canara Bank is only Rs 678.28 crore," it said in a regulatory filing.
The Bengaluru-headquartered lender said that the account was declared as fraud and reported to the RBI on 10 February 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 December 2018 by our Bank," it said.
Out of Rs 7,926 crore fraud amount appearing in the press note, the amount of lending made by all the 14 consortium members is Rs 4,765.70 crore, it added. Remaining amount was lent under multiple banking arrangement, Canara Bank added.
"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 October 10, 2018. The company is under the process of liquidation," it said further. The company was engaged in building infrastructure across various sectors including, ports, bridges, oil and gas, power and mining, as per its website that also informs about the ongoing liquidation process.
On Friday, the CBI booked Hyderabad-based Transstroy (India) Ltd and its directors for alleged bank fraud of over Rs 7,926 crore to a consortium led by Canara Bank. The officials said it was one of the biggest banking scams in the country.
The Central Bureau of Investigation (CBI) has alleged that loans were misappropriated by the directors causing a loss of Rs 7,926.01 crore to the consortium members. The central probe agency had carried out searches at the premises of the company and the accused directors, including former Telugu Desam Party (TDP) MP Rayapati Sambasiva Rao, which led to the recovery of incriminating documents, its spokesperson had said in a statement a day earlier.
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