The Criminal Investigation Department (CID) of the Karnataka Police has arrested an official of a private logistics firm and a UCO Bank manager in connection with a loan scam where loans to the tune of nearly Rs 17 crore were taken in the names of 35 arecanut farmers from the Davangere region of Karnataka in the year 2020.
The private firm, CGR Ltd, was accused of conniving with UCO Bank officials in 2020 to fraudulently sanction and transfer loans ranging between Rs 42 lakh and Rs 48 lakh each (amounting to nearly Rs 17 crore) in the name of 35 farmers in the Davangere region.
The fraud came to light when the 35 farmers were served notices by the bank in 2020 for failing to make payments on the loans obtained in their names by CGR Ltd.
One of the farmers, Annappa Veerappa, 38, filed a police complaint in December 2020 against UCO Bank officials and some local farmers at Mandipet in the Keriyagalahalli village in Davangere who had facilitated the alleged loan scam.
The investigation was handed over to the CID following reports of CGR’s involvement in similar scams across the country. According to the police, the CID arrested Vivek Reddy, an official of CGR, and Bhakti Bhushan, a UCO Bank manager this week and took them into custody.
The police said that the CGR officials and UCO Bank officials connived to get loans sanctioned in the names of farmers under the pretense of the loans being part of an export-oriented arecanut warehousing and logistics business venture operated by CGR.
According to the police complaint, Krishnappa, a resident of the Keriyagalahalli village approached Annappa Veerappa and others in July 2019 with the offer of a subsidised farm loan of Rs 5 lakh from the local UCO Bank against the production of land documents, Aadhaar card, and identification details.
The farmers were told that they would be given a grant of Rs 2 lakh each by the government in addition to the loan. The accused allegedly obtained Aadhaar cards, ID cards, and blank signed cheques from 35 farmers for the clearance of their Rs 5 lakh loans.
According to the complaint of Annappa Veerappa, the bank officials duped the farmers by sanctioning loans in the range of Rs 42 lakh and Rs 48 lakh each in their names on August 2, 2019. On the same day, the farmers were each given a sum of Rs 50,000 to Rs 1 lakh.
When the farmers checked with the bank about their loans they realised that sums ranging between Rs 42 lakh and Rs 48 lakh had been sanctioned in their names but found that the amounts were transferred to “CGR company through RTGS from UCO Bank” after deduction of Rs 50,000 to Rs 1 lakh.
The UCO Bank manager informed the farmers at the time that the matter would be resolved soon but the farmers received notices from the bank on June 8, 2020, for defaulting on the repayment of the loan amounts and the interest on the loans.
