CBI Registers FIR Against UK-Based Firm Over Alleged $10 Million Exim Bank Fraud

The Central Bureau of Investigation (CBI) has registered a case regarding an alleged $10 million fraud involving India Exim Bank, a UK-based company, its former directors, and associated entities. Officials confirmed the development on Wednesday, noting that the agency acted on a complaint filed by G Selva Kumar, assistant general manager at India Exim Bank.

According to the complaint, which now forms the basis of the FIR, the bank suffered a wrongful loss of $10 million, representing the outstanding amount as of September 29, 2014. The loan account was classified as a non-performing asset (NPA) on that date and was subsequently labeled a 'fraud' in accordance with Reserve Bank of India guidelines.

The FIR names Hanjer Biotech (Erith) Ltd, a UK-registered company that has since been dissolved, alongside its erstwhile directors and guarantors. Other entities named in the case include Navi Infrastructure Engineering Pvt Ltd (NIEPL) and Hume Synthesis Pvt Ltd, as well as unknown public servants.

Details from the complaint indicate that Hanjer Biotech entered into an agreement with Navi Infrastructure Engineering for the supply of machinery required for a recycling project in the United Kingdom. The borrower company subsequently approached Exim Bank for financial assistance. The total estimated cost of the project was submitted as $15.90 million, which was planned to be funded through a promoter contribution of $5.90 million and the remaining balance via a term loan from the bank.

The executive committee of India Exim Bank in Mumbai approved a term loan of $10 million for the project in 2012. However, investigators allege that the machinery was never supplied. Instead, the advances received for the purchase of the machinery were reportedly diverted by extending loans to related parties, including Hume Synthesis. The entire loan amount of $10 million was allegedly siphoned off.

The case highlights ongoing regulatory and investigative scrutiny into cross-border credit defaults and fund diversions involving state-backed financial institutions in India.

"This case underscores the critical importance of rigorous post-disbursement monitoring and end-use verification for cross-border project financing. When international trade credit and capital expenditure loans are involved, financial institutions must maintain stringent oversight of supply contracts and vendor payments to mitigate the risks of fund diversion and long-term asset classification issues." — Dr. Shishir Gupta, Founder & CEO, StartupLanes