CBI charges builder, bankers with fraud

New Delhi: Claiming to have exposed a builder-banker nexus, CBI has filed a chargesheet against AVJ Developers Pvt Ltd, its directors and officials from Bank of India, ICICI and UCO Bank for a coordinated fraud on banks and homebuyers.

Its investigation revealed bank employees bypassed norms to provide undue financial advantages to builders. The scheme, CBI found, involved using “proxy” buyers to secure fraudulent loans and routing funds through sister concerns.

This case is part of a Supreme Court-mandated probe into 50 builders nationwide. Charges include criminal conspiracy, cheating and corruption. Earlier, three chargesheets were filed against Jaypee Infratech, Rudra Buildwell Constructions and Dream Procon.

The latest legal action follows an extensive probe into allegations of large-scale cheating and criminal misconduct that have impacted numerous homebuyers and several major financial institutions.

The probe centres on AVJ Developers Pvt Ltd, and its sister concern, Kesar Builders Pvt Ltd. According to CBI, directors of these firms collaborated with officials from the three banks to orchestrate a fraudulent scheme designed to secure undue financial gains through the exploitation of the housing market.

The investigative findings detail a pattern of institutional bypass and betrayal of fiduciary duties. CBI has alleged that the bank officials abused their official capacities to facilitate the builder’s activities, violating established regulatory norms and procedures to extend pecuniary advantages to the companies.

This conduct resulted in significant wrongful losses for the banks and individual investors who had placed their savings into these projects based on false assurances.

A key component of the alleged conspiracy involved the recruitment of “proxy” or fictitious homebuyers. These individuals reportedly conspired with the developers to misrepresent facts to lending institutions, obtaining home loans under false pretences.

The funds generated through these fraudulent applications were then routed through sister concerns like M/s Kesar Builders to obscure their origin and use.

The chargesheet, filed before a court, includes several counts under Indian Penal Code and Prevention of Corruption Act, specifically targeting criminal conspiracy, cheating, forgery and criminal misconduct.

“By consolidating substantial documentary and oral evidence, CBI has highlighted a broader conspiracy involving the diversion and misutilisation of funds. This move underscores a reinforced commitment to holding individuals accountable for economic offences that undermine the interests of common citizens. As the investigation continues, the agency aims to ensure that the fraudulent practices within the real estate and banking sectors are thoroughly addressed,” CBI said.