Avaya Industries: CBI searches Mumbai sites, SBI alleges fraud

The Central Bureau of Investigation said it searched several locations in Mumbai on 29 October 2026 in a bank fraud case against Avaya Industries Ltd and its directors, following a complaint from State Bank of India. The bank alleges that the company and its directors obtained credit facilities through misrepresentation, causing it a wrongful loss of Rs 58.48 crore.

The searches included residential properties linked to the company’s directors, the CBI said in its statement dated 29 October. The agency reported recovering documents it described as incriminating and relevant to the investigation.

According to the CBI, the case names Avaya Industries, its directors, unidentified public servants and unidentified private persons. Its statement does not identify the directors or explain the suspected involvement of the other persons.

The Rs 58.48 crore figure is the loss alleged in SBI’s complaint, as described by the CBI. It is not an amount reported recovered during the searches or a loss determined by a court.

What SBI’s complaint alleges

The CBI’s account places the alleged misrepresentation at the point of obtaining credit facilities, meaning arrangements through which a bank makes borrowing available to a customer. The statement does not specify the types of facilities SBI extended to Avaya Industries, their sanctioned amounts or when they were obtained.

The complaint describes alleged irregularities across the company’s business records, money owed by customers, transfers of funds and assets pledged to secure borrowing. The CBI lists these as methods through which the accused allegedly perpetrated the fraud, rather than as separate findings established by the searches.

One allegation concerns fictitious sales and inflated stocks. In plain terms, these concern sales recorded without genuine underlying business and inventory shown at an overstated level. The agency’s statement does not explain whether the alleged stock inflation concerned quantities, valuations or both.

Another allegation involves suppression and non-recovery of export receivables. Export receivables are amounts owed to a business for supplies made to overseas customers. The allegation therefore concerns both how those outstanding amounts were disclosed and whether they were collected. The CBI has not identified the overseas customers, the amounts attributed to them or the export transactions under examination in this statement.

The agency also cited fabrication of debtor balances. A debtor balance records how much a customer or another party owes a business. This allegation concerns the reliability of the company’s records of money due to it, distinct from whether an accurately recorded debt was subsequently recovered.

The statement provides no transaction-by-transaction account or separate loss figure for these categories. It attributes the overall alleged loss to the conduct described in the complaint.

Fund transfers and assets pledged to the bank

According to the CBI, the complaint also alleges diversion of funds through unsecured advances. An unsecured advance is money provided without an asset pledged as security for its repayment. The allegation here is that such advances were used to divert funds; the agency has not named their recipients or stated the amounts transferred.

The complaint further alleges that transactions were routed through another bank without authorisation. The CBI statement does not identify that bank or describe the account arrangements and transactions involved.

A separate part of the complaint concerns the alleged unauthorised sale or misrepresentation of mortgaged property and hypothecated assets. Both terms concern security provided for borrowing. A mortgage creates an interest in property as security, while hypothecation generally allows a borrower to retain possession of movable assets pledged to a lender.

The distinction matters to the nature of the allegation: this part of the complaint concerns assets backing the borrowing, rather than sales records or money due from customers. However, the CBI statement does not identify the property, describe the assets or explain which were allegedly sold and which were allegedly misrepresented.

These remain allegations under investigation. The agency’s announcement does not set out a court finding on the company’s conduct or the individual responsibility of any director.

Scope of the searches and pending examination

The CBI reported searches at several Mumbai locations but did not give an exact count. Although it identified residential properties linked to directors among the premises searched, it did not provide a fuller breakdown of the locations.

The agency described the recovered documents as incriminating, but did not publish an inventory or explain what any individual record establishes. Its announcement does not report an arrest. It also does not specify the case-registration date, the period of the alleged fraud or the legal provisions invoked.

Neither the CBI statement nor the supplied reporting by News Nation and IANS, carried by Lokmat Times, includes a response from Avaya Industries or its directors. SBI’s allegations are available through the CBI’s account of its complaint, rather than a separate statement from the bank in these reports.

The CBI said the seized material was being examined to ascertain the extent of the alleged conspiracy, misappropriation and diversion of funds, and to establish the roles of the people involved.