The Central Bureau of Investigation (CBI) has initiated action against Unity Infraprojects Ltd, registering a First Information Report (FIR) in connection with a suspected ₹3,847.58 crore fraud case. This development has led to searches at four locations in Mumbai, and former Chairman and Managing Director (CMD) Kishore Krishnarao Avarsekar has been booked in the case.
The case came to CBI’s attention following a complaint from the State Bank of India (SBI), one of the consortium members. The SBI alleged that fraudulent activities had occurred at its commercial branch in Mumbai, with company officials siphoning off the bank’s funds through fictitious transactions. The accused were accused of manipulating and falsifying financial records with the intent to defraud the bank and gain unlawfully at its expense.
Recent searches were conducted at the premises of the accused individuals. According to available information, Unity Infraprojects Ltd’s account was classified as a non-performing asset (NPA) on June 24, 2014. By that time, the bank had extended over ₹3,800 crore from 23 lenders, secured against movable and immovable assets, personal guarantees, and corporate guarantees. It took five years before the bank declared the account holder a fraud, following a forensic audit that uncovered significant irregularities.
The forensic audit, conducted by BDO India LLP and submitted on September 25, 2019, revealed various irregularities. These included fictitious transactions, improper adjustments in accounting entries aimed at defrauding the bank through data manipulation, diversion of funds through non-consortium accounts, and unexplained excess payouts designed to siphon off bank funds. Additionally, the audit report flagged related party transactions as part of the fund diversion scheme.
The CBI has taken legal action against the company, its former chairman, and former directors and executives under sections of the Indian Penal Code (IPC) related to criminal conspiracy and cheating, along with provisions of the Prevention of Corruption Act. This case marks another instance of financial misconduct coming to the forefront in India’s corporate landscape.