Bank of Baroda-led club files complaint against C Mahendra Exports for defrauding them

MUMBAI: A consortium of 11 lenders led by Bank of Baroda has filed a complaint with the Economic Offences Wing against C Mahendra Exports for defrauding them by selling assets mortgaged with the banks. Collectively, the banks have an exposure of Rs 1,300 crore, including principle and penal interest, with the firm that manufactures and exports large diamonds.

C Mahendra Exports transferred eight windmills mortgaged with the banks to Leo Da Vinci Exports without the banks' knowledge, said the complaint. The loan is classified as non-performing for all lenders since 2014 after the company failed to pay dues. In December 2014, lenders initiated action against the under the Securities & Reconstruction of Financial Assets (Sarfaesi) Act for recovery.

Banks said C Mahendra Exports had mortgaged three office premises located at Opera House, one in Bharat Diamond at BKC, eight flats, a factory and land parcel in Surat and a plot in Bhuj and Sangli, each.

At the time of creating mortgage in 2013, banks obtained a valuation report which clearly mentions wind turbines as part and parcel of the securities for the Bank of Baroda consortium.

"It imperative to mention that land beneath the wind turbines is also mortgaged to the Bank of Baroda consortium and there the act of the company of selling or transferring of the said wind turbines is nothing but a criminal breach of trust and cheating," said Bank of Baroda in a complaint that EThas viewed.

The consortium pointed out that C Mahendra Exports "transferred the wind power projects to one M/s Leo Da Vinci Exports Ltd without consent and knowledge of the existing charge holders — the banks." This, the borrower did "surreptitiously and in open defiance of the law of the land."

Bank Of Baroda