Hotel Company CEO Booked By CBI For Loan Fraud

The Central Bureau of Investigation (CBI) today registered a case against a private company operating across Hyderabad and various other cities.

The directors of the Golden Jubilee Hotels Private Limited, the group that owns of the Trident Hotel, were booked after they allegedly committed a bank loan fraud of Rs 1,285 crore.

The company had been established for the construction of Hotel Trident and Hotel Oberoi. Its failure to complete the second project reportedly led to a paucity of funds which is why the loans taken for the same were not paid.

An FIR was lodged against the accused, company directors Laxmi Narayan Sharma, Arjun Singh Oberoi, Neha Ghambir and Yashdeep Sharma, on March 31 for cheating, criminal conspiracy and criminal misconduct.

In the FIR, the CBI stated that in 2015, the directors had taken a term loan of Rs 679 crore which was to be repaid by 2019, and had borrowed an additional Rs 50 crore through non-fund based credit facilities under a consortium arrangement led by the Bank of Baroda.

The investigating agency also said that the company had failed to finish the project for which it had ostensibly taken the loans, while the four accused had indulged in "fraudulent trading, fund diversions and other suspicious transactions". Further, it added, that the company had repaid neither the loans in the agreed upon instalments nor the interest amount.

"The borrower company and its directors entered into a criminal conspiracy with unidentified public servants of the Bank of Baroda and cheated the bank and the other lenders by diverting the funds and utilising them for purposes other than those for which they were given. As a result, the loan account became a non-performing asset on December 31, 2020," the CBI alleged.

The body has conducted searches in Hyderabad and Delhi which led to the recovery of incriminating documents. Reports say that a forensic audit report done by Ernst and Young also revealed major irregularities in transactions.

The CBI booked the case after the corporate financial services wing of the Bank of Baroda in Himayatnagar lodged a complaint against the company. The bank is one of several lending institutions that had extended loans to the company.

The investigation is still ongoing.