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ED conducts search operations in Nagpur, Kolkata, Vishakhapatnam in ₹4,000 crore bank loan fraud case
The Enforcement Directorate’s (ED) Nagpur sub-zonal office carried out three days of search operations from August 12 to August 14 at 14 official and residential premises in Nagpur, Kolkata, and Vishakhapatnam as part of a money laundering investigation.
ED officials said on Wednesday they are investigating a bank loan fraud by M/s Corporate Power Limited and its promoters and directors: Manoj Jayaswal, Abhijeet Jayaswal, Abhishek Jayaswal, and others. The searches were carried out under the provisions of the Prevention of Money Laundering Act (PMLA) of 2002.
The investigating agency seized a large number of incriminating documents and froze ₹209.08 crore in listed securities, mutual funds, fixed deposits, and bank balances. Cash amounting to 55.85 lakh has also been seized.
“The ED initiated investigations on the basis of an F.I.R. [first information report] registered by the Central Bureau of Investigation [CBI] against M/s Corporate Power Limited and its promoters and directors, Manoj Jayaswal, Abhijeet Jayaswal, Abhishek Jayaswal, and others, for criminal conspiracy, cheating, and forgery. As per the complainant, Union Bank of India, the accused persons submitted manipulated project cost statements to avail loans and also diverted the bank’s funds, causing wrongful loss to the tune of ₹4,037 crore (₹11,379 crore including interest),” an ED official said.
Fake books
Investigations revealed that the promoters of the accused company colluded and engaged in fictitious transactions, and the fabrication of the books of accounts of the company and its related entities.
Numerous discrepancies were observed during the investigation. The agency said, “Apart from M/s Corporate Power Limited, other Abhijeet Group entities similarly committed bank loan fraud, such as M/s Corporate Ispat Alloys Limited, amounting to ₹136.09 crore, and M/s Abhijeet Integrated Steel Ltd., amounting to ₹180 crore Abhijeet Group created an intricate web of more than 250 shell entities, which were used by the accused promoters for the purpose of layering, integrating, and utilising proceeds of the crime (POC). These same entities were also used for introducing bogus share premiums into the books of accounts and to inflate the books of Abhijeet Group entities, enabling them to avail fresh loans from banks.”
A network of 20 charitable institutions was also identified during the search proceedings. Dummy directors were employed by Abhijeet Group — usually employees of the group — and dormant companies were used as holding companies. Assets were accumulated from POC in the form of movable assets like listed and unlisted shares, loans and advances, mutual funds, fixed deposits, and immovable properties.
Details of several properties, valued at more than ₹50 crore, belonging to Abhijeet Group have been gathered during the searches. These were derived from the POC. “Apart from the accused persons mentioned in the FIR, several key persons who acted in connivance with them and assisted in the process of money laundering have been identified, and their statements were recorded under Section 17 of the PMLA. The agency is still investigating the matter,” an ED official said.
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money laundering