Justice Verma’s name was in CBI’s FIR in sugar mill fraud case, OBC had complained
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Justice Yashwant Verma of Delhi High Court, who made headlines after a large amount of cash was found from his government bungalow, was also named in the Simbhaoli Sugar Mill bank fraud in Ghaziabad in 2018.
The Central Bureau of Investigation (CBI) had registered an FIR against him along with other accused in the bank fraud case of Rs 97.85 crore. Justice Verma was the non-executive director of the sugar mill at that time and his name was at number 10 in the FIR. The case started on the complaint of Oriental Bank of Commerce (OBC), which accused the sugar mill of defrauding the bank through a fake loan scheme.
According to the bank’s complaint, between January and March 2012, the Hapur branch of OBC distributed Rs 148.59 crore to 5,762 farmers to help them buy fertilizers and seeds. Under the agreement, the funds were to be transferred to an escrow account before being distributed to the individual accounts of the farmers. Simbhaoli Sugar Mill had guaranteed to repay the loan and cover any default or identity fraud on the part of the farmers.
Fake KYC documents submitted: The company submitted fake Know Your Customer (KYC) documents and embezzled funds. By March 2015, OBC declared the loan as fraudulent. This included a total loss of Rs 97.85 crore and an outstanding amount of Rs 109.08 crore.
Former CM Amarinder’s son-in-law was also an accused
Another key person named in the FIR was Gurpal Singh. Singh was the deputy managing director of the company and the son-in-law of then Punjab Chief Minister Amarinder Singh. The Enforcement Directorate (ED) later launched a parallel investigation into money laundering based on the CBI FIR.
Allahabad High Court ordered CBI probe: In December 2023, the Allahabad High Court ordered a fresh CBI probe into seven banks involved in the loan disbursement. The High Court had said that the fraud has shaken the conscience of the judiciary. The High Court had found that several bank officials in collusion with Simbhavali Sugar Mill passed a loan of Rs 900 crore. OBC was the only bank that approached the Enforcement Directorate. This resulted in the seizure of some properties.
Supreme Court overturns High Court order, CBI probe closed
Acting on the order of the Allahabad High Court, the CBI started a fresh investigation in February 2024. It was aimed at finding out why banks continued to give loans to Simbhavali Sugar Mill between 2009 and 2017, even though the company was a loan defaulter. The investigation covered the names of the company, its directors and unknown bank officials. However, the Supreme Court overturned the High Court order forcing the CBI to close the investigation.
