CBI Arrests Mumbai Developer in Alleged ₹280-Crore SBI Fraud Case

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Mumbai: The Central Bureau of Investigation (CBI) has arrested Mumbai-based developer Harresh Mehta in connection with an alleged bank fraud case involving the State Bank of India (SBI), with the financial loss to the bank estimated at around ₹280 crore.

Mehta, associated with Rohan Lifespaces Ltd and Rohan Constructions Ltd, was arrested by the CBI’s Economic Offences Wing (EOW) in Mumbai. He was subsequently sent to judicial custody.

The case has its roots in a complaint filed by SBI’s Thane branch and dates back several years. According to the CBI, the investigation concerns alleged irregularities in the sanction and utilisation of loans obtained by Rajput Retail Ltd (RRL).

How the case began

The CBI said it began investigating the matter in 2016, after receiving a complaint from SBI against RRL’s directors, identified as Vijay Gupta and Ajay Gupta.

According to the FIR registered by the agency, RRL and its directors allegedly entered into a conspiracy with other accused persons, including unidentified government officials, to obtain loans from the bank.

The agency alleged that forged and fabricated documents were used in the process and that the bank was ultimately cheated of approximately ₹280 crore.

The investigation subsequently expanded beyond the original allegations against RRL’s directors. During the course of the probe, the CBI said it found the alleged involvement of Mehta and companies linked to him.

Loans linked to The Ruby building

One of the key aspects examined by investigators was a series of loans sanctioned for the purchase of premises on three floors of a building known as The Ruby in Mumbai.

According to the CBI investigation, a loan of approximately ₹149 crore was sanctioned for the purchase of the premises. In addition, RRL was allegedly sanctioned a short-term loan of ₹16 crore in November 2011.

Together, the two loans amounted to around ₹165 crore.

The agency further alleged that approximately ₹155 crore from these loan arrangements was credited to accounts maintained by Ruby Mills Ltd in February 2012.

Investigators examined the movement of the funds and the documents submitted to the bank as part of the larger probe into the alleged financial irregularities.

CBI filed chargesheet in 2018

The investigation continued for several years. In July 2018, the CBI submitted a chargesheet in the case.

However, the agency’s subsequent investigation allegedly brought additional information to light regarding the role of Mehta and entities associated with him.

As part of its investigation, the CBI conducted searches at the offices and residences of Harresh Mehta, as well as premises connected with Ruby Mills Ltd.

The searches were aimed at gathering documents and other material that investigators believed could help establish the alleged financial transactions and relationships between the parties involved.

Mehta’s lawyers reject allegations

Mehta’s legal team has strongly disputed the allegations made against him.

While opposing the extension of his custody, his lawyers argued that Mehta had cooperated fully with the investigating agency. They also pointed out that the original case had been registered several years earlier, in 2016.

His lawyers maintained that Mehta was not involved in any forgery, fabrication of documents or cheating of the bank. They also challenged the legality of his arrest.

The defence’s position is that Mehta should not be held responsible for the alleged wrongdoing merely because his name surfaced during the investigation.

A case spanning several years

The case highlights the complexity of large-scale banking fraud investigations, particularly when multiple companies, loan transactions and financial documents are involved.

The allegations relate to transactions that took place more than a decade ago, while the investigation has continued through several stages over the years.

The CBI is examining the alleged roles of different individuals and entities and the manner in which the loans were sanctioned, transferred and utilised.

The agency’s allegations, however, remain allegations at this stage. The accused persons are entitled to defend themselves in court, and guilt can only be established through judicial proceedings.

What the CBI alleges

At the heart of the case is the CBI’s allegation that RRL and its directors conspired with others to obtain loans from SBI by allegedly relying on forged or fabricated documents.

The agency has alleged that these actions caused a substantial financial loss to the bank, which it has pegged at approximately ₹280 crore.

The investigation later allegedly pointed towards the involvement of Harresh Mehta and companies associated with him, leading to his arrest.

The CBI’s action represents another stage in a case that has remained under investigation for years.

Legal proceedings to continue

With Mehta in judicial custody, the matter will now proceed through the legal process. Further investigation and court proceedings are expected to determine the exact roles and responsibilities of the individuals and companies named in the case.

The allegations made by the CBI will be tested before the court, while Mehta’s defence has already rejected the accusations and questioned the legality of his arrest.

For now, the case remains a long-running investigation into alleged financial irregularities involving SBI loans, multiple corporate entities and transactions running into hundreds of crores.

News source: Information for this article was gathered from a variety of reliable news outlets.