Sanjay, Sandip Jhunjhunwala arrested by CBI for Rs 3,871 crore bank fraud

The promoters of REI Agro Limited Sanjay and Sandip Jhunjhunwala were on Thursday arrested by the CBI. The siblings, who are also manufacturers of Rain Drops Basmati rice, were arrested by the central bureau of investigation for allegedly cheating a consortium of 14 banks led by UCO bank of Rs 3871 crore.

The UAE authorities had issued an Interpol red corner notice against Sanjay Jhunjhunwala while the CBI had also issued a lookout circular. While a FIR was registered against him in 2015, he was arrested on Thursday when he arrived in Delhi. The siblings' company is accused of defrauded banks to the extent of Rs 3,871 crore since 2013 through conspiracy, cheating and forgery.

The company is said to have cheated the banks using close to 150 shell companies. The modus operandi was based on a fixed commission that was routed through a group of brokers by creating false invoices, documents of money transfers for non-existent transactions. CBI sources claimed that Sanjay Jhunjhunwala was also facing a case of misappropriation of AED 160 million for which the UAE authorities had issued a Red Corner Notice against him.

14 public sector banks were cheated by the accused persons through diversion of funds, showing high cost of false capital expenditure, suspected investment in related companies, falsely inflating debtors, sale at higher price to related or doubtful parties, fraudulent high sea transactions, non-compliance with fund utilization, corporate guarantee without permission of consortium members etc.

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