Search the Internet          Tips  Sites: Finance, Investment

CID files chargesheet in Charminar Bank fraud case

Syed Amin Jafri in Hyderabad

The Crime Investigation Department of Andhra Pradesh police on Thursday filed a chargesheet against the Charminar Cooperative Urban Bank's former chairman, directors, bank staff and borrowers for defrauding the bank to the tune of millions of rupees.

The chargesheet was filed in the metropolitan sessions judge court, Hyderabad, against Charminar Bank, 19 business establishments and 68 accused persons -- a total of 88. Two of the accused are, however, dead.

Apart from the bank's former chairman, late Syed Alamdar Hussain Sajjad Aga, the other accused included 18 members and ex-members of the board of directors, three managing directors and ex-MDs, two members of the bank staff handling the loans division, two valuators, four employees of the cooperative department and 33 borrowers who had borrowed Rs 445 million from the bank (their present outstanding amount is Rs 577.8 million). In all, 31 accused have been arrested and produced before the court.

Fourteen investigating officers and their teams, during the course of investigations, visited Nizamabad, Mahbubnagar, Cuddapah, Rayachoti towns, various places in Rangareddy district, Hyderabad, Pune and Mumbai and examined 260 witnesses and recorded their statements.

The CID sleuths collected more than 1,200 documents and records from different banks, sub-registrar offices, mandal revenue offices, registrar of firms, registrar of companies, AP State wakf board etc. They filed the chargesheet within the stipulated time of 60 days.

The CID filed the chargesheet on four employees of the cooperative department who audited the accounts of Charminar Bank for the years 2000-01 and gave rosy picture of the functioning of the bank based on which it published its 16th annual report and attracted large number of depositors.

The chargesheet has pinpointed the defrauding of the bank by some unscrupulous borrowers who had mortgaged forged and fictitious documents relating to government lands, a municipal park in the city, wakf board lands and other properties.

KPV Subbaiah and 10 of his associates, for instance, had floated 11 business establishments and swindled Rs 264.5 million from the bank by mortgaging 665 acres of land at Bodakonda and 95 acres of land at Nomula village in Rangareddy district. The bank's valuator had valued this property at Rs 600,000 per acre but as per the sub-registrar, the cost per acre was between Rs 12,000 to Rs 24,000.

M Mohan Reddy, three of his family members and their employees floated five companies and borrowed Rs 49.5 million by depositing fake and fabricated documents of three properties. One of these properties was a residential premise in Banjara Hills in the city where Mohan Reddy lived. The house was sold wayback in 1994 but the bank accepted mortgage in 1997 as if Mohan Reddy was the owner of the house.

Muntezir Mahdi, brother-in-law of the bank's former chairman Sajjad Aga, floated a fictitious construction company and borrowed Rs 33 million. The entire amount was sanctioned and paid by accepting a surety of Rs 500,000 only, from Mir Zulfeqar Ali, former mayor of Hyderabad.

Zulfeqar Ali himself borrowed Rs 25 million in 2001 stating that he would demolish an old structure and construct properties in the city, but these properties had already been constructed and sold during 1995-2001. Rao Venkat Rao floated an agro-tech company and mortgaged two acres and 10 guntas of government land at a Municipal park at Banjara Hills and borrowed Rs five million without establishing the unit.

A former Congress legislator, late S V Ramana Reddy, floated a company and borrowed Rs 9.9 million in 1998 by mortgaging 1,196 square yards of a house stating that he would construct flats, sell them and liquidate the loan. Investigations revealed that the said apartments were already constructed in 1987-88 by another builder and the flats were sold out and there was no open place at all.

A fruit vendor Ijaz Ahmed floated an export firm and borrowed Rs 25 million from the bank by mortgaging lands belonging to Andhra Pradesh wakf board at Attapur on the city outskirts. Mohammed Shabbir borrowed Rs 15 million for a stone-crushing unit by mortgaging 16.9 acres of inalienable government patta lands of Budwel village.

Two brothers Siraj Anwar and Khalid Anwar floated a construction firm and borrowed Rs 10.5 million by depositing sale deeds of agricultural lands which do not have legal title as the sale deeds were executed after the death of GPA (General Power of Attorney) holder of the lands.

Satish, nephew of K Venkateswara Rao, former chairman of the scam-tainted Krushi Cooperative Urban Bank, borrowed Rs 3.6 million, claiming that he was a supplier of building materials.

Two flats, which were owned by the father and mother of KV Rao and were subsequently transferred in the name of Chanda Hussaini, personal driver of Sajjad Aga's wife and A H Razvi, a servant of Aga, were subsequently mortgaged as security. These flats were under attachment by CID in connection with Krushi Bank scam.

Aga Asad Ali, a close associate of Aga, floated a construction company and borrowed Rs 12 million by mortgaging a small house, worth Rs 1 million, owned by his wife, located in the Old City. By investing part of the loan amount, Asad Ali alongwith Sajjad Aga's wife, Shaheen Aga, son Mir Aga and son-in-law Arif Hussain, purchased 7,000 square feet of commercial space in a prime plaza opposite the state secretariat. This property was already under attachment with CID.

ALSO READ:
Co-op banks: Of laxity, loopholes and scams
The Rediff Budget Special
Money
Business News