By Abhay Ray 
Introduction
Delhi Economic Offences Wing has arrested the erstwhile Director of Ganesh Benzoplast Ltd & M/s GBL Chemical Ltd, namely Ramakant Shankarmal Pilani, who had misrepresented the financial status of the company by using forged documents and cheated the complainant NBFCs to the tune of rupees more than 20 crores.
EOW Cracks Down on the Largest NBFC Fraud in History
The EOW had received complaint from NBFC M/s Lok Sewak Leasing & Investment Pvt. Ltd. against M/s Ganesh Benzoplast Ltd, M/s GBL Chemical Ltd, and their authorized representatives. The complainant alleged that in the month of January 2024, the alleged companies approached them projecting that their companies are known for their excellence in the market for manufacturing of quality Sodium Benzoate. They stated that they were in need of funds for further growth of their company.
It was informed by alleged company that their company M/s GBL Chemicals Ltd. had achieved a target of turnover of ₹ 95 crores during 2018 and now it has increased to ₹ 212 crores. They also informed that they are hoping to manage the sales target of ₹ 1,000 crore by 2026 with 240 permanent employees on the roll. Thereafter, the accused gave them in writing a request letter seeking a debt /equity investment of ₹ 7.03 crore. Later on, the facts mentioned in request letter discovered to be false, fabricated and forged. Similarly, loan of ₹ 13 crores was also taken by the alleged company from NBFCs M/s IM Securities Pvt. Ltd. and M/s Capital Trade Links Ltd. Being induced by the false information and misrepresentation, the complainant companies disbursed a loan of more than ₹ 20 crores to M/s GBL Chemical Ltd. subject to the condition that its holding company namely M/s Ganesh Benzoplast Ltd. will also sign as co-borrower /co-applicant in the loan process. The loan proceeds were diverted in bank account opened on the basis of forged documents. After that, the loan proceeds were misappropriated by the alleged companies, officials further stated.
Big revelation made in Investigation
DCP (EOW) Guriqbal Sidhu said that Ramakant Pilani is the mastermind of the entire crime. He was the erstwhile Director/CEO of M/s Ganesh Benzoplast Ltd. & M/s GBL Chemical Ltd. He alongwith his associates, created fake board resolutions of M/s Ganesh Benzoplast Ltd. & M/s GBL Chemical Ltd. and induced the complainant companies to disburse the funds totaling to more than ₹ 20 Crores. Being the key managerial person of the company, he was handling the financial matters of M/s Ganesh Benzoplast Ltd. & M/s GBL Chemical Ltd. and opened a bank account in SBI of M/s GBL Chemical Ltd. on the basis of forged /fake credentials. During investigation, it has been revealed that immediately, after receiving the loan amount, the same was misappropriated by diverting it to different bank accounts in which the accused Ramakant Pilani was holding control, the officer added. The accused is a habitual offender and is also involved in three cheating cases of similar nature in Bangalore/Mumbai. He used to misrepresent the actual financial status of his companies in order to obtain loan and then divert the funds to different accounts in which the accused was holding control. In this way, he usurps the funds obtained from NBFC companies.
EOW’s Bold Action-Aftermath of the Biggest NBFC Fraud,
The Economic Offences Wing (EOW) has launched a major crackdown following one of the largest financial scams in the NBFC (Non-Banking Financial Company) sector. Two prominent companies allegedly colluded to defraud the NBFC of billions by manipulating financial records, inflating asset values, and diverting funds through fraudulent transactions.
In response, the EOW arrested key executives from both companies involved in the scam. The investigation has revealed significant gaps in regulatory oversight, leading to calls for stronger checks within the financial sector. The fallout has been severe, with the affected NBFC suffering major financial losses, eroding investor confidence. Legal actions against those responsible are ongoing, while authorities work on reforming auditing and governance practices to prevent future frauds.
The Role of NBFCs in the Scam
NBFC fraud, two major companies exploited systemic weaknesses within the financial sector to orchestrate a massive scam. They manipulated financial statements, inflated asset values, and provided false documents to secure loans and other financial benefits from the NBFC. By diverting funds and falsifying transactions, the companies misled the NBFC about their true financial standing.
NBFCs, typically more flexible than banks, became an easy target for such schemes due to less stringent regulatory oversight. The companies involved capitalized on this flexibility, bypassing due diligence processes and hiding their fraudulent activities for months. The scam has raised serious questions about the role of NBFCs in financial oversight and their vulnerability to exploitation. This incident highlights the need for stricter governance, auditing standards, and regulatory reforms to protect against such large-scale frauds in the future.
Conclusion
This case highlights the vulnerabilities within the NBFC sector, particularly in verifying the authenticity of transactions and collateral. It also emphasizes the importance of robust due diligence and regulatory oversight to prevent such frauds in the future. With the EOW’s action, authorities send a strong message that financial crimes will be pursued with seriousness, and perpetrators will face strict consequences. However, the case also serves as a reminder of the need for continuous reforms in the financial sector to protect institutions and investors from similar threats moving forward.
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