In the politically-active sugar belt of western Uttar Pradesh, Simbhaoli Sugars’ alleged financial wrongdoings have come under the CBI scanner with the federal probe agency preparing a list of officials of the company and different banks whom it plans to question over a fraud involving Rs 1,300 crore, including Rs 900 crore principle amount and Rs 400 crore interest.
The debt-ridden mill, whose cane purchases from farmers in Western Uttar Pradesh are considered critical for keeping the local economy moving and countering farm distress, is believed to have colluded with top bank officials to swindle the public money.
The probe into the scam, which has shown signs of possible money laundering, is also likely to shed light on the politician-industrialist nexus due to which a company in default continued to get loan after loan and cheat cane farmers whose dues were never cleared in total.
Farm leaders and politicians have always made unpaid dues of cane growers an election plank ahead of elections in the state. Sugarcane hub Shamli is the leading cane producing district in the state, with 843 quintal per hectare production. Meerut and Muzaffarnagar have 832 and 828.5 quintal per hectare yield respectively.
A senior CBI official hinted that investigators will also look into the specific roles of bank officials who facilitated loans for the company without any guarantee.
The scam spanning across two decades, starting 2003, revolves around the company siphoning off loan money amounting up to Rs 1,000 crore. The banks from which the company took loans include SBI, UCO, Punjab National, ICICI, Oriental Bank of Commerce, BOI and BOB.
An initial complaint against the company indicated that some bank officials first gave unsecured loans to the company, knowing very well that it would never be able to repay the loan, and later helped the debt-ridden firm get more loans from other banks.
CBI investigators said that their probe into the case will look to find the money trail and the route through which bank loans were either siphoned off or parked in save havens or sister concerns.
While hearing a related matter, the Allahabad High Court also criticised Uttar Pradesh’s commissioner, cane and sugar, for allowing the company to purchase cane from farmers despite the fact that the company had not cleared Rs 279-crore dues of farmers related to the 2022-23 season.
The court expressed shock and surprise that the banks had advanced hundreds of crores of rupees to the petitioner company knowing the fact that the firm had already defaulted with the loans taken by other banks previously and been declared NPA, still the banks went ahead and approved loans running into several hundred crores and the entire loan was disbursed without following the mandatory steps/procedures, which banks are supposed to take before disbursing the loan.