After Kingfisher Loan Default, it’s another jolt to Public Sector Bank in India. This time Zoom Developers Pvt Ltd who allegedly swindling Public Sector banks (PSB) for more than Rs 2650 crore. This scam is regarded as biggest cases of money laundering using trusts registered in offshore tax havens.
Zoom Developers Pvt Ltd chairman Vijay Choudhary is having a chain of at least 450 companies, many of them registered in several offshore jurisdictions, including the US, UK, Switzerland, Singapore, Germany and Dubai. The most affected public sector banks are Punjab National Bank (PNB), Syndicate Bank, Canara Bank, United Bank of India and Union Bank of India with exposure of Rs 966 crore and more. Other banks where Zoom loan account are fell in to NPA are UCO Bank, Bank of Baroda,Central Bank of India, SBI, Indian Bank, Oriental Bank of Commerce and Andhra Bank.
The mode of fraud was some what related to merchant trading, Trade finance through shell companies i.e. There are more than 450+ registered shell companies.Through these foreign companies, head of zoom developers Vijay Choudhary generated fake work contracts and obtained bank guarantees in India on the basis of these contracts and advance received from them. These foreign entities with their foreign bankers later invoked these bank guarantees and recovered the money pledged as guarantee when the Indian companies failed to deliver.
There was twist in this transaction as both the Indian companies and the foreign entities were allegedly controlled by Zoom Developers and their associates. It is believed that there were approx 15 shell companies in US, nine in Dubai, seven in Singapore, four in Germany , three each in UK and Switzerland and two each in China and Zimbabwe to create fake contracts and launder money .
A charge sheet has already been filed by the CBI in this case for causing “wrongful loss to five banks to the tune of Rs 966 crore to Public Sector Banks like Punjab National Bank, Syndicate Bank, Canara Bank, United Bank of India and Union Bank of India.