Top Ten Corporate Frauds in India That Cost Banks, Public and Investors Billions

1. Nirav Modi and Mehul Choksi (PNB Scam)

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Nature of Fraud: Fraudulent issuance of Letters of Undertaking (LoUs)
Modus Operandi: Nirav Modi and Mehul Choksi allegedly colluded with bank officials to obtain LoUs without proper collateral. These LoUs were used to secure overseas credit, which was then siphoned off.
Fraudulent Amount Involved: Approximately Rs 14,000 crores (USD 2 billion)
Arrest: Nirav Modi was arrested in the UK in March 2019. Mehul Choksi was detained in Dominica in May 2021.
Present Status of Case: Both are fighting extradition to India. Modi is in a UK prison; Choksi’s extradition process is ongoing.

2. Vijay Mallya (Kingfisher Airlines)

Nature of Fraud: Financial mismanagement and LoanDefault
Modus Operandi: Mallya allegedly obtained loans based on forged documents and personal guarantees, which were later defaulted on.
Fraudulent Amount Involved: Over Rs 9,000 crores (USD 1.2 billion)
Arrest: Mallya was arrested in the UK in April 2017 but is out on bail.
Present Status of Case: He is fighting extradition to India. Multiple legal cases are ongoing in Indian courts.

3.Satyam Computers

Nature of Fraud: Corporate accounting Scam
Modus Operandi: Founder Ramalinga Raju inflated the company’s revenue, profit, and profit margins for several years by falsifying accounts.
Fraudulent Amount Involved: Rs 7,800 crores (USD 1.1 billion)
Arrest: Ramalinga Raju was arrested in January 2009.
Present Status of Case: Raju was convicted and sentenced to seven years in prison in 2015. He was released on bail in 2018.

4.IL&FS (Infrastructure Leasing & Financial Services)

Nature of Fraud: Financial mismanagement and fraud
Modus Operandi: IL&FS allegedly inflated the value of its assets and underreported liabilities, leading to massive defaults.
Fraudulent Amount Involved: Rs 91,000 crores (USD 12.7 billion)
Arrest: Several senior executives have been arrested.
Present Status of Case: Investigations and legal proceedings are ongoing. The government has taken control of the company.

5. Bhushan Steel

Nature of Fraud: Bank fraud
Modus Operandi: Bhushan Steel allegedly used forged documents to secure loans and defaulted on repayments.
Fraudulent Amount Involved: Rs 56,000 crores (USD 7.8 billion)
Arrest: Promoter Neeraj Singal was arrested in 2018.
Present Status of Case: Legal proceedings are ongoing, and the company was acquired by Tata Steel in 2018.

6.Rotomac Pens

Nature of Fraud: Loan default and money laundering
Modus Operandi: The promoters allegedly used loans for purposes other than those specified, leading to defaults.
Fraudulent Amount Involved: Rs 3,695 crores (USD 500 million)
Arrest: Promoter Vikram Kothari was arrested in 2018.
Present Status of Case: Legal proceedings are ongoing.

7. ABG Shipyard

Nature of Fraud: Bank fraud
Modus Operandi: The company allegedly used falsified documents to obtain loans and then siphoned off funds.
Fraudulent Amount Involved: Rs 22,842 crores (USD 3.2 billion)
Arrest: Promoters have been questioned; arrests may be pending.
Present Status of Case: Investigation by the Central Bureau of Investigation (CBI) is ongoing.

8. Amrapali Group

Nature of Fraud: Real estate fraud
Modus Operandi: The company collected funds from homebuyers but diverted the money to other businesses, leaving projects incomplete.
Fraudulent Amount Involved: Rs 3,000 crores (USD 400 million)
Arrest: Promoters Anil Sharma and others were arrested in 2018.
Present Status of Case: The Supreme Court of India is overseeing the completion of projects and refunding buyers.

9. DHFL (Dewan Housing Finance Corporation Ltd.)

Nature of Fraud: Financial mismanagement and LoanDefault
Modus Operandi: The promoters allegedly diverted funds obtained through loans to shell companies.
Fraudulent Amount Involved: Rs 31,000 crores (USD 4.3 billion)
Arrest: Promoters Kapil and Dheeraj Wadhawan were arrested in 2020.
Present Status of Case: Legal proceedings are ongoing, and the company is under resolution.

10. Punjab and Maharashtra Cooperative (PMC) Bank

Nature of Fraud: Bank fraud and financial mismanagement
Modus Operandi: Bank officials allegedly created fictitious accounts to hide over ₹6,500 crores (USD 900 million) in loans made to the Housing Development and Infrastructure Limited (HDIL) group, which were not repaid.
Fraudulent Amount Involved: Rs 6,500 crores (USD 900 million)
Arrest: Several top officials, including the bank’s managing director and HDIL promoters, were arrested.
Present Status of Case: Investigations and legal proceedings are ongoing. The bank is under the supervision of the Reserve Bank of India (RBI).