Ex-MD of Kemrock arrested for duping Allahabad Bank

Vadodara: Former managing director of Kemrock Industries and Exports Ltd (KIEL), Kalpesh Patel, was arrested by the detection of crime branch (DCB) on Thursday for allegedly cheating Allahabad Bank of Rs 443 crores. Patel had taken loans from the bank between 2007 and 2011 but defaulted on payment.

This was the second case of cheating within a day against Patel, who has also been charged with criminal conspiracy for duping the bank.

A local court remanded Patel to two day of police custody. Allahabad Bank’s senior manager Pradeep Kumar Ataniya told the police in his complaint that KIEL had taken cash credit loan of Rs 120 crores, foreign letter of credit loan worth Rs 105 crores, bank guarantor loan worth Rs 30 crore and term loans worth Rs 189 crores. The company had mortgaged its properties in Asoj on the Halol Road, materials, stocks, machinery, offices and a flat on the Old Padra Road.

“In 2006, KIEL got a contract of manufacturing carbon fibre from National Aerospace Laboratory (NEL) following which the company took loans for expansion. The total loans amount to about Rs 1,400 crore of which around Rs 700 crores were given by Allahabad Bank,” said Jaydeepsinh Jadeja, DCP (crime).

KIEL, however, stopped repaying after which the bank declared the loans as non-performing assets (NPA). “The bank said that it conducted forensic audit report of KIEL’s accounts and found out that the company’s management had diverted the loan taken for their business purpose for other use,” Jadeja told TOI.

“The report revealed that KIEL bought land worth Rs 250 to Rs 300 crore in the special economic zone (SEZ) of Sterling Industries in Sarod village at Jambusar from the loan amount. The bank kept making efforts to recover their loan amount from Patel but to no avail,” Jadeja added.

The bank management had given an application to the police that investigated the case and then booked KIEL’s directors, Kalpesh Patel and Mahendra Patel.

Patel was arrested by the prevention of crime branch (PCB) on Wednesday after a private finance firm accused him of cheating. Patel has been accused of not paying back loan of Rs 2.50 crore and selling off the property that he had mortgaged with the finance firm.