HC quashes CBI proceedings against Gangakhed Sugar in bank fraud case
This story was originally published at 19:16 IST on 23 December 2024
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NEW DELHI – The Delhi High Court on Monday quashed a first information report and proceedings against Gangakhed Sugar and Energy Ltd. in an alleged INR 4.09 billion bank fraud case. However, the court said it was only quashing the case against the company and not against the erstwhile directors and guarantors of Gangakhed Sugar and Energy, who are also accused in the first information report.
The high court said Gangakhed Sugar and Energy cannot be prosecuted as the offences were committed prior to the approval of the insolvency resolution plan of the company. The court asked Gangakhed Sugar to assist the
Central Bureau of Investigation in the investigation.
The insolvency proceedings against Gangakhed Sugar started in 2019, whereas the first information report was registered in 2023 for offences committed between 2008 and 2019. The resolution plan by Six Sigma Investment Fund for Gangakhed Sugar was approved in 2023 and the new management has taken over the company.
The Central Bureau of Investigation filed the first information report against Gangakhed Sugar, its directors, promoters and several public servants based on a complaint by UCO Bank. According to the first information report, the accused defrauded the consortium of six banks by cheating and criminal misconduct, causing a pecuniary loss of INR 4.09 billion.
The first information report said Gangakhed Sugar availed various credit facilities from a consortium led by UCO Bank to the tune of INR 5.77 billion. The facilities were availed to set up an integrated cane processing plant. In 2018, UCO Bank initiated a forensic audit, and based on the audit report, approached the Central Bureau of Investigation against the company for fraud.
On Monday, the shares of UCO Bank ended 1.4% lower at INR 43.57 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Saji George Titus
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