India's biggest-ever banking scam is unraveling in Andhra Pradesh after the Central Bureau of Investigation booked directors of Transstroy (India) Limited for alleged bank fraud of over Rs 7,926 crore.

The scale of alleged fraud overshadows the funds reportedly swindled by Nirav Modi (Rs 6,000 crore) and his uncle Mehul Choksi (Rs 7,080.86 crore).

The CBI has named company chairman-cum-managing director Cherukuri Sridhar and additional directors Rayapati Sambasiva Rao and Akkineni Satish in the FIR for allegedly defrauding a consortium led by Canara Bank. Searches were conducted at the premises of the accused in Hyderabad and Guntur, following which incriminating documents were recovered.

According to the 43-page FIR, accessed by Asianet Newsable, the fraud perpetrated by the accused persons came to light when the report of a forensic audit conducted by global audit and advisory firm KPMG came to the fore in January 2020.

According to Canara Bank, the fraud happened at the Prime Corporate Branch in Secunderabad where the accused diverted funds with an "objective to defraud creditors and to gain unlawfully at the cost of the bank's expense."

CBI spokesperson RK Gaur told media persons, "The consortium was formed with other banks, led by Canara Bank. It was further alleged that the accused had involved in falsification/fabrication of books of accounts, fudging of stock statements, tampering of balance sheets, round-tripping of funds."

In response to the FIR, Sambasiva Rao said, "CBI has incorrect information about the fraud. Canara Bank said that the defrauded amount was Rs 700 core and not Rs 7000 crore. This is nothing but political vendetta."

Sweepers and drivers as firm directors?

A review of TIL's bank statements revealed that the company created fictitious business firms wherein partners or directors of these firms were either employees, directors or related parties. 

The FIR alleges that in some cases, servants, maids, sweepers, and drivers were shown as directors or partners in these firms.

The FIR notes the funds worth Rs 6,643.19 crore were mainly routed to four of the firms, which included:

* Rs 2172.4 crore to Padmavathi Enterprises (in the name of TIL employee Sudhakar Babu)

* Rs 679.12 crore to Unique Engineers (in the name of former TIL director Sambasiva Rao Malineni)

* Rs 1865.47 crore to Balaji Enterprises (in the name of TIL subsidiary director Harish Babu Vemulapalli)

* Rs 1925.86 crore to Ruthvik Associates (in the name of former TIL Senior Finance Manager Shiva Kumar Korivi)

The CBI FIR also states that these firms were non-existent and were created to operate their fraudulent activities with the help of employees and former employees.