After Punjab National Bank (Nirav Modi) and Bank of Baroda (Rotomac) Canara Bank has joined the list of banks attracting an inquiry by the Central Bureau of Investigation into fraudulent transactions involving RP InfoSystems and its directors. The company, which manufactured computers under the brand name CHIRAG and was into servicing of computers, networking, integration and other hardware related products, has been accused of varying frauds. According to the first information report filed on 26 February against Shibaji Panja, Kaustuv Ray and Vinay Bafna, all directors and Debnath Pal, who was Vice-president (finance) of RP Info Systems and unknown officials of Canara Bank by Deputy general manager of Canara Bank the company has defrauded Canara Bank and 9 other banks to the tune of Rs 515.15 crore.

One of the company directors, Shibaji Panja also a media baron, booked by the CBI in the case is known to be close to West Bengal Chief Minister Mamata Banerjee. Panja was Banerjee’s campaign associate in 2011 Assembly polls in the State.

The complaint, according to senior officials, states that the fraud was committed by creating fabricated stock or receivables and debtors statements and forged drawing power letters to avail funds from Canara Bank (Rs 40 crore), State Bank of India (Rs 170 crore), State Bank of Bikaner & Jaipur and State Bank of Patiala (then subsidiaries of SBI and now merged with SBI), Union Bank of India, Allahabad Bank (Rs 40 crore), Oriental Bank of Commerce, Central Bank of India, Punjab National Bank (Rs 70 crore), and Federal Bank on the basis of the same. There could be criminal connivance between the company, its directors and some bank staff, the complaint alleges. Punjab National Bank is already in the limelight for the Nirav Modi fraud case and Oriental Bank of Commerce for Simbhaoli Sugar.

Canara Bank has alleged that RP Infosystems under Shibaji Panja and other accused fraudulently did not route sale proceeds through the loan accounts as is generally the process and instead siphoned off the entire amount after fabricating financial statements. The amount was also inflated to avail additional money in borrowing that was siphoned off.
The claimed debtors GAIL India, CEAT Ltd had informed State Bank of India that they had no business dealing with RP Infosystems which added as proof against the falsely claimed receivables by the company which led to banks led by Canara Bank lodging an FIR in consultation to the other banks with exposure. The company has been availing funds from 2012 onwards and the loans are now non-performing assets (NPAs).

Prima facie, the accused has committed offences punishable under multiple sections of the Indian Penal Code. CBI has booked the computer manufacturing company and the accused and carried out searches at various locations in Kolkata belonging to the company including their corporate office. CBI has also undertaken search operations at the residence of all accused.

This is the second high-profile political connection fraud after Simbhaoli Sugar and OBC, which involves Punjab CM Amarinder Singh’s son-in-law, to come out this month.

With a 15-day deadline to state-run banks to take pre-emptive action and identify risks to tighten their systems more such transactions are likely to find political links of the era of the second United Progressive Alliance government.

The CBI had previously booked the company and its directors Kaustav Ray, Vijay Bafna along with Panja in 2015 in connection with the case related to IDBI with cheating, criminal conspiracy and forgery of valuable security. The agency had only focused investigation on the exposure to IDBI bank. In the present case, CBI has booked Panja along with Ray and Bafna and Debnath Pal, apart from unknown officials of Canara Bank. In the 2015 FIR, CBI had said that the loans were taken in 2012-13 and turned into NPA. In 2015, when CBI booked Panja and RP Infosystems for fraud against IDBI Bank, it said in a statement, “It was alleged that the accused persons had availed credit facilities from IDBI Bank, Kolkata by furnishing false stock/debtors statement and cheated IDBI Bank. An alleged loss of Rs.180.44 crores (approximately) was caused to IDBI Bank.”

The same modus operandi as mentioned in the current FIR against the company was used in the 2015 case.

In February 2015, Panja had been dramatically arrested by immigration officials for another fraud case based on a complaint filed by Jeevan Kumar Senior VP(finance) of IFCI Factors Ltd, a government company, while returning from Dhaka with Mamata Banerjee. West Bengal police had detained him on the basis of a lookout circular issued by Economic Offences Wing of Delhi police. Panja had accompanied Banerjee as a non-official delegate to Bangladesh on a three-day visit.

Kumar had alleged that Panja, who was then the managing director of RP Infosystems, had procured a short-term assistance of Rs 18 crore from IFCI Factors by furnishing fake documents. A case, under Sections 420 (cheating), 120B (criminal conspiracy) and 471 (forgery), was registered against Panja.

Banerjee had at that time distanced herself from Panja. He has since not been seen with the West Bengal chief minister.

Panja was earlier part of several empowered committees in West Bengal related to film and culture earning him the title of the ‘showbiz gatekeeper’ for Trinamool Congress. He has also been an official advisor for industrial promotion under the Mamata Banerjee government.

In 2016, Panja was questioned for his alleged links to the Saradha Scam. Panja was the chief organiser of Mamata’s painting exhibition at Town Hall after she became CM in 2011 where some paintings of the chief minister were sold to Sudipto Sen of Saradha scam fame. CBI questioned him on whether he knew further details about Saradha scam before he pursued Sen to buy pictures of Mamata Banerjee, proceeds of which were used as funds for the Trinamool Congress. They also quizzed him to know if he had got any money from Sen.

With the political scene heating up for 2019, the political overtones of all such cases cannot be ignored. The Modi government has till now been accused of going soft in the corruption charges against political opponents, which was part of the 2014 campaign rhetoric. The arrest of Karti Chidambaram will also be seen in the sequence of events as a conscious effort on the part of the government to correct the narrative and make up for the lost time in the run-up to elections.