In 2018, the Economic Offence Wing of Mumbai Police had arrested three directors of a private firm – Parekh Alluminex Ltd (PAL) – in a bank fraud case of Rs 4,000 crore. After a complaint was filed by Axis Bank against the firm for cheating of Rs 250 crore, the police nabbed Bhawarlal Bhandari, Premal Goragandhi, and Kamlesh Kanungo. Along with Axis Bank, there were around 19 other banks that had credited money to the firm.
The arrested directors were charged with floating fake invoices and manipulated bills through bogus companies to commit the fraud at the bank's main branch, Fort, using letters of credit, reported The Times of India in 2018.
Axis Bank's complaint against Parekh Alluminex Ltd (PAL) mentioned Amitabh Parekh (died in 2013), Rajendra Gothi, Devanshu Desai, Kiran Parikh, and Vikram Mordani.
The police said PAL initially availed three short-term loans of Rs 125 crore from Axis Bank, which were repaid to "gain confidence". In 2011, PAL, led by Parekh, approached the private bank for working capital of Rs 127.5 crore.
Parekh submitted minutes of a meeting of the firm's board of directors, though no such meeting was held. It was reported that he did this solely to induce the bank to sanction credit. The bank sanctioned a letter of credit to PAL, which was meant to be used to buy raw material and equipment.
"Our exposure is part of a lending arrangement involving around 22 banks and the bank has filed an FIR with the EOW, post declaring the concerned exposure as a fraud. We are fully cooperating with the investigating authorities," said an Axis Bank spokesperson.
Economic Offence Wing who were investigating the case had eventually filed the chargesheet in the case. Mr.Vikram Mordani, though mentioned in the FIR, was not chargesheeted according to a Times of India report on November 2020.
With the advent of the COVID-19 pandemic and the strain it has had on the businesses, there are heightened expectations and fear if more loans would turn sour.