Car Showroom Directors Booked for Rs 3.2 Crore Loss to SBI in Banjara Hills

HYDERABAD — The Central Crime Station police in Hyderabad have registered a case against a car dealership and its directors for alleged loan default and the diversion of hypothecated assets, which resulted in a financial loss of Rs 3.2 crore to State Bank of India's City Centre branch in Banjara Hills.

The complaint was lodged on August 12 by K Sanjay Kumar, the branch manager of the SBI City Centre branch located in Banjara Hills. Based on the complaint, the police initiated action against Quality Plaza Auto Cars Private Limited, which has its office address in Habsiguda, and its directors, identified as N Sai Tharun and N Bhaskar Rao.

According to the details provided in the police complaint, Quality Plaza Auto Cars Private Limited had initially availed a Rs 4.2 crore credit facility from HDFC Bank. SBI subsequently took over the credit facility in September 2017 with an enhanced exposure of Rs 1.7 crore.

Following multiple restructurings of the borrower’s accounts carried out between 2018 and 2019 due to declining sales, the borrower failed to adhere to the sanctioned terms of the credit facility.

Bank inspections conducted in early 2020 revealed that the company's showroom in Nizamabad had been closed down. During the inspection, the bank officials discovered that hypothecated stock, plant, and machinery valued at Rs 4.9 crore were missing from the premises.

The complainant alleged that the hypothecated assets were disposed of without obtaining prior permission from the bank, and the proceeds generated from the disposal were never credited back to the loan account.

Following the default and violations, the loan account was declared a non-performing asset by the bank in February 2020. SBI later formally classified the account as fraud in February 2021 before approaching law enforcement authorities to pursue legal action against the firm and its management.