CBI Books Ex-Directors of Ahmedabad-Based Pharma Firm in Rs 57 Crore SBI Fraud Case

Ahmedabad: The Central Bureau of Investigation (CBI) has registered a case against the former directors of Ahmedabad-based pharmaceutical company M/s Jay Formulations Ltd, along with unidentified public servants and private individuals, for allegedly defrauding the State Bank of India (SBI) of Rs 57.05 crore through an alleged bank loan fraud.

The FIR was registered by the CBI’s Kolkata unit based on a complaint filed by Prakash Singh Bisht, Deputy General Manager of the SBI Consortium. The case names former Managing Director Rakshit Ashwinbhai Patel, former Director Komal Rakshit Patel, and former Director Arjav Maheshbhai Patel, all residents of Satellite, Ahmedabad, among other unidentified accused.

According to the complaint, Jay Formulations Ltd, which has its registered office at Hare Krishna Complex on Ashram Road and a manufacturing unit at Bavla, had maintained banking relations with SBI since 1996. Investigators alleged that between 2018 and 2021, the accused, in alleged collusion with each other, availed themselves of credit and loan facilities worth crores of rupees through fraudulent means. The loan account was later classified as a Non-Performing Asset (NPA) on June 28, 2021.

The alleged fraud came to light through a forensic audit conducted by a firm appointed by the bank. In its report dated February 8, 2024, the auditors reportedly found that the company had submitted false, inflated, and fabricated stock statements to obtain and withdraw substantial funds from the bank.

The audit further revealed that nearly 90% of the company’s purchases were shown as being made from only two firms Meet Pharma and Sukrit Pharma while approximately 84% of sales were shown to two entities, DMP Healthcare and Trisak Healthcare. Investigators found that these entities were allegedly linked to the company’s own employees or shareholders.

The forensic findings also raised questions over the authenticity of business transactions. Despite claims of goods movement worth crores of rupees, investigators reportedly found no supporting documents, such as lorry receipts (LRs) or e-way bills, in the company’s records.

Further irregularities were also flagged, with auditors finding inconsistencies in billing records, including instances where sales transactions allegedly appeared to have been recorded even before corresponding purchase documentation had been generated.

The CBI has launched an investigation to ascertain the role of all accused and determine the extent of the alleged fraud. DeshGujarat