A suspected scam has come to light, in which Mumbai’s rich spices and dry fruits traders (known as the Gandhi Group) were allegedly ‘Evergreening’ their ‘Cash Credit’ facility at Bharat Co-operative Bank’s Mumbai branch for several years. Evergreening loans refer to extending new loans to a borrower who is unable to repay the existing loans.
These Ghatkopar area traders are identified as ‘M/s Smart Distributors’ and ‘M/s Nileshkumar Vinodchandra & Co’, whose cash credit’ limit is now classified as a Non-Performing Asset (NPA) by Bharat Co-operative Bank. The bank took the decision on December 13 after the two firms defaulted on their payment terms to the lender. Documents show that a whistleblower had informed Bharat Co-operative Bank about the alleged bogus ‘Stock Statements’ and ‘Book Entries’ submitted by Smart Distributors and Nileshkumar Vinodchandra & Co. claiming to hold stock justifying the ‘Cash Credit’ availed from the bank.
A whistleblower said that ‘cash credit’ from the bank circulated among family members. No authentication for spices and dry fruits was shown in third-party AMPC godowns. It added that the potential scam could be larger and more prevalent in the APMC which has a beeline for warehouses.
The whistleblower letter alleged that the two borrowers were round-tripping money from Bharat Co-operative Bank to related parties and own companies by showing bogus commodity stocks in third-party godowns. The whistleblower has questioned if the bank ever checked the tax receipts or challans on the commodities bought and sold by the traders. It also questioned whether the bank verify the ownership or lease agreements of the APMC premises shown to them.
The whistleblower said that Nilesh Kumar Vinodchandra & Co. (NVC) had shown a certain shop D-7, APMC Market = 1, Phase 2, which was sold nearly four years ago to Girdharlal & Sons. However, the statement submitted in September 2024 still mentions the above address. There is no lease agreement between Girdharlal & Sons and NVC.
Other statements submitted by the company have shown the address as D-9, APMC Market. The godown belongs to Kisan Kirti Agro Pvt Ltd., whose promoter Kirti Rana is among the 25 accused in the Rs 62 crore FSI scam at APMC.
Whistleblower reveals the modus operandi
The Whistleblower stated in his letter to Bharat Co-operative Bank that the leading directors, partners and promoters of Smart Distributors and Nilesh Kumar Vinodchandra & Co. diverted the funds borrowed from the bank to their son’s company and other related entities with cross holdings or similar partners as the borrowers.
The borrowers from Bharat Co-operative Bank and most Sundry Debtors and Creditors, all stayed under one roof in a multi-story bungalow in the opulent Rajawadi area of Ghatkopar. More than a dozen companies are shown registered at the same address, the letter reveals.
“Please find attached with this letter, a stock statement provided by Nilesh Kumar Vinodchandra & Co. (NVC) to Bharat Co-operative Bank. Please take note that as per the statement up to August 31, 2024, NVC, which is the borrower from Bharat Co-operative Bank, is showing Nilesh Distributors (at Sr. no. 4) as its Sundry Debtor with money receivable for more than 120 days. NVC has four partners Vinodchandra Gandhi, Suryakant Gandhi, Chandrakant Gandhi and Haresh Gandhi. Vinodchandra Gandhi is father of Nilesh Gandhi and other three are real uncles of Nilesh Gandhi. Father and uncles (are all senior citizens above the age of 65 years and 70 years) borrowing from Bharat Co-operative Bank and lending to Nilesh Distributors, the son’s Co.,” the whistleblower has alleged.
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