The cases of fraud committed by five companies in this sector have been analyzed.

In Pharmacy,
Textile, Ferrous Metals, Pharmaceutical Products and various ranges of steel products, the
companies were in the manufacturing business. The Companies had started to use credit facilities
from the banks under consortium agreement led by one of the banks in the form of working
capital (fund-based & non fund-based).

One company exported goods against shipping bills and discounted export bills on various dates.
Since the bills were unpaid for a long time, the lead bank asked the Customs Duty Commissioner
to verify the authenticity of these bills.

According to the Commissioner's report, only a small number of shipping bills were genuine, a
few shipping bills related to ICD, Ludhiana and other shipping bills were not genuine and
forged.

The other company made Rs.6740 crore purchases. Rs.1679.45 crore was to buy fancy shirting
from this.

Mismatches have been observed in the items referred to in the LC invoice reports and the goods
referred to in the company's accounts.

The turnover was underestimated in another organization. There was no actual buying or
moving of stocks as depicted in its account books and financial statements by the borrower
company.

The management of the company misappropriated the funds. To raise the money, they
investigated all possible avenues. In the audited financials, the auditors of the company had mis-
matched accounting information with respect to the trading accounts and the non-reporting of the
same.

The payment made to the creditors of the LCs was credited to the accounts of the debtors of the
corporation from which it was eventually transferred either to the account of the creditor
company or to its subsidiaries.
Another firm had imported medical and chemical products from overseas manufacturers
headquartered in Singapore and had a branch office in Dubai in Hong Kong and Singapore. The
shipping company owned the same shareholder as the manufacturer.

The firm is interested in electronics, computer peripherals and other products. There were
computer and computer peripheral consignment payments, with the organization shipping
machines and computer peripherals by subsidiary transfers to its Dubai branch office.
The export and import reports submitted by the company to the bank in respect of Merchanting
Exchange payments allegedly related to pharmaceutical and related products were falsified.

The other Company completed its Balance sheet for the year 2011-12 and audited it on
30.04.2012 with an income of Rs.23.74 crores. The company received credit facilities from
cooperative lenders on the basis of the Balance Sheet. The organization eventually updated its
2011-12 audited B / s on 05.09.2012 without notifying any member banks. The income was
reduced to Rs.0.34 crore in the updated balance sheet.

The Group held current accounts with the banks that were not part of the alliance. In these
accounts, the credit turnover was Rs.176.96 crore. The company lost Rs.241.83 crore in 2012-13
compared to Rs.0.34 crore gain in 2011-12 due to Rs.2178 crore revenue in both years.

The company receives routed sales from non-consortium banks without prior consortium
permission. The Corporation had not issued CA-certified book liability reports.

Companies have defrauded the banking system through unscrupulous activities, such as the mani
pulation of books of accounts, the removal, depletion and disposal of mortgaged stocks without t
he knowledge of the bank.