Simbhaoli Sugars Loan Accounts Declared Fraud by PNB

Simbhaoli Sugars Limited has been notified by Punjab National Bank (PNB) that its loan accounts have been classified as "Fraud" due to alleged misappropriation of funds and criminal breach of trust, and forgery with intent to commit fraud. The company is currently undergoing Corporate Insolvency Resolution Process (CIRP) since July 11, 2024. Simbhaoli Sugars states that the credit facilities pertain to the period prior to CIRP. The company also highlights protections under the Insolvency and Bankruptcy Code, 2016 (IBC), including Section 32A, which provides immunity against liabilities for offenses committed before CIRP upon approval of a resolution plan. Therefore, the fraud classification is not expected to have a material impact on the company.