CBI books 27 ‘Patels’ for Rs 415 crore bank fraud

A group several firms run by members of a Patel family in Tiruchy had cheated Corporation Bank by taking loans worth hundreds of crores with fraudulent documents, claimed sources.

The matter came to light when the assistant general manager of Corporation Bank in Trichy, Pramod Kumar Reddy Kancharla, approached the CBI in September. According to the complaint, Prabhat Group — often referred as Patel Group in many of the bank records — formed by members of a ‘Patel’ family in Tiruchy had taken loans from the bank over years and by 2014, the bank had released Rs 829 crore to the firms against a security.

Recently, however, the bank discovered that the actual value of security was only about Rs 90 crore. Apparently, the firms had inflated the value of the security in the documents submitted to the bank while taking the loans. Accordingly, two bank appraisers too have been booked in the case.

The firms owe the bank Rs 415.20 crore till date and if they fail to repay the loan, Corporation Bank stands to lose approximately Rs 325 crore.

Bank officials also found that transactions in the loan account were mainly internal transfers between different firms under the Prabhat Group, showing that the money was mostly circulated within the group and not spent on other parties.

The Prabhat Group mainly trade timber locally and globally and have established units in Trichy, Dindigul and Tenkasi.