How Companies Play On The 'Duplicate Effect' To Dupe Banks

New Delhi: Vijay Mallya may have emerged as the face of bank fraud, but there are many more instances of lesser known private companies accused of cheating banks of crores of rupees.

One unusual modus operandi is found on the website of Punjab National Bank (PNB), which recently declared a list of close to 900 willful defaulters on its website. NDTV 's show Truth vs Hype found several of these have very similar names, are registered at the same address, and have taken crores of rupees as loans from the bank.
 For instance, three companies with the word 'Apple' in its registered name have defaulted on an accumulated loan of more than Rs 400 crore - Apple Industries, Apple Commodities Limited and Apple Sponge and Power Ltd. They are all shown as registered at Anupam Plaza, Hauz Khas in South Delhi.

From their balance sheets, it's unclear what business activity they are engaged in.

NDTV visited this office only to find it closed.

A search on the web also gives an East Delhi address in Bhagwanpur Khera in Ramnagar, Shahdara for the same set of companies.

The one-room Shahdara office, however, is not limited to these three companies. NDTV found 17 companies whose names are prominently displayed on a board outside. These companies also have the same set of people as its directors.

The lone employee representing all these companies at the Shahdara office has no information about their dealings. His said job is only to collect mails that arrive at the address.

Meanwhile, NDTV received a call from Ashish Garg, who calls himself the founder of these companies. He explained that the office address is only for mailing purposes and the corporate office is in Noida, Uttar Pradesh.

He said that the loan taken from PNB under Apple Sponge and Power Limited was for a steel plant in Maharashtra. He had no explanation for what the other companies did.

The PNB list also contains another 'mystery' web of companies, based in Mumbai: same address, same five people as directors. Arman foods, Arya Enterprises, Honey Taste Private Limited and Magictime Trading Company Private Limited have defaulted on Rs 40.38 crore from the bank.
 Two of them have not filed government records. When we visited their registered address, Gurusharnam Complex in Panvel, it turned out to be a residential complex. The security guards informed us that Mithilesh Rajput and Devprakash Rajput, two of the directors of the company as per PNB list, do not live there but visit occasionally. The guards had never heard of these companies.

The loan amounts accessed by these companies, if looked independently, may appear relatively small. But there are a total of 900 'duplicate' companies on PNB's list, with a total default of over Rs 1,000 crore.  

Which raises questions as to how the bank lent the money, with so little diligence.