UCO Bank fraud: Shares plunge 18% after CBI booked ex-chairman

Monday, 16 Apr, 2018

State-owned UCO Bank slumped to almost 12-year low today after Central Bureau of Investigation (CBI) filed a case against former bank chairman Arun Kaul relating to an alleged Rs 621-crore bank loan fraud case on Saturday.

On 14 April, CBI booked Kaul and others in connection with an alleged Rs 621-crore loan fraud which has caused a loss of over Rs737 crore to the bank.

Police said officials at the bank had colluded with private infrastructure firm Era Engineering Infra Ltd, and investment banking firm Altius Finserve Pvt Ltd, to siphon bank loans.

The CBI official said the agency sleuths are going through the documents they recovered.

After filing the case, the CBI on Saturday carried out searches at over 10 places in Delhi and Mumbai including at Kaul's residence, the premises of the CAs and the two firms.

CBI, according to Reuters, said in a statement that Arun Kaul, the bank's chairman between 2010-2015, had helped clear the loan.

Ltd. among others. There were allegations that the accused persons were involved in a criminal conspiracy defrauded the UCO Bank with an involvement of about Rs 6.21 billion by diversion and siphoning of the bank loans, revealed the news sources. It was found that the company did not utilize the amount for the objective for which it was disbursed and diverted the funds. "The loan was not utilized for the sanctioned goal and was secured by producing false end use certificates issued by the chartered accountant and by fabricating business data", the CBI said.