After submitting the case, CBI browsed eightpremises consisting of houses of Directors of Simbhaoli, its factory, business workplace and signed up workplace in Delhi, Hapur and Noida.
Among the senior management executives of the business is stated to be connected to a leading politician in Punjab.
Again, the CBI has not acted on the bank's complaint for three months as they had approached them in November 17, 2017.
The case of loan fraud against comes at a time when the banking sector reels under pressure from Rs 11,400 crore fraud in Punjab National Bank (PNB), involving allegedly by Mumbai-based diamond jeweller Nirav Modi and his uncle Mehul Chowksi.
On May 13, 2015, the bank declared it as loan fraud of Rs 97.85 crore to the Reserve Bank of India. Previously, CBI rested on OBC's grievance in Dwarka Das case for 6 months.
According to the CBI, Simbhaoli Sugars had approached the Oriental Bank of Commerce in 2011 seeking around Rs 148 crore in loan to finance almost 5,200 sugarcane farmers. The second loan was declared NPA (non-performing asset) on November 29, 2016, almost three weeks after demonetisation of Rs 1,000 and Rs 500 notes was announced. It was likewise expected to send the KYC and other requisite files together with the loan application of private farmers. The loans were disbursed through individual loan accounts opened for farmers and consolidated amount of each disbursement was credited in the Escrow (current) account of Simbhaoli Sugars on the basis of undertaking given by the company that inputs like seed, fertilizers and other necessary equipments etc have been supplied by it to all the individual farmers.
Simbhaoli Sugars Ltd is one of the largest sugar mills in the country. According to Central Bureau of Investigation officials, the Hapur-based Simbhaoli Sugars Ltd in 2011 fraudulently diverted funds received as loans for sugarcane farmers and self-help groups.
OBC alleged that in addition to the existing NPA, the bank, under multiple banking arrangements, sanctioned another corporate loan of Rs 110 crore to the company on January 28, 2015 to pay its outstanding loan of Rs 97.85 crore. This loan turned NPA in November 2016. The account turned NPA on March 31, 2015 and was later declared as alleged fraud by the bank to RBI on May 13, 2015 for an amount of Rs 97.85 crore.