SQL Server 2008 :: Unable To Create Folder If Present Already In A Share Path

I'm, using my script to many location to create folder to save output files and if the folder is removed/not present it can create it without any noise. But the problem is, while I use the same sort of script to check if a folder is present in the sharedpath it will not create it to copy all bkp files from local to remote path works good, but if you delete the folder or rename the exisitng folder and if the below script tries to create the folder it created as "fILE", very interesting. Per IT team they have given SQL Server account the full rights to create/delete/alter folder/files.

Do I need to use seperate script or way to create / alter folders in the sharepath?

SET NOCOUNT ON
Declare @len INT, @i INT, @Left varchar(max), @right varchar(max), @SERVERNAME sysname,@finalServer sysname
declare @rc int, @dir nvarchar(4000)
DECLARE @cmd1 sysname, @cmd2 sysname, @cmd sysname;
Declare @extPAth varchar(max)

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