Pramesh S Jain
The Directorate of Enforcement (ED),Bengaluru Zonal Office,has seized cash and gold worth Rs.1.27 crore and frozen bank accounts containing Rs.18 crore during searches conducted in connection with an alleged Rs.899.35-crore bank fraud linked to Deepak Cables (India) Limited (DCIL).
The searches were carried out under Section 17 of the Prevention of Money Laundering Act (PMLA),2002,at multiple premises linked to the company and its associates on May 21 and May 29.
According to the ED,several incriminating documents belonging to DCIL,its director K.Venkateswara Rao, Kolkata-based businessman Mahesh Agarwal,director of Adhunik Corporation Ltd.,and other related persons were seized during the operation.
The money laundering investigation stems from a CBI case registered against DCIL,K.Venkateswara Rao and others for allegedly cheating a consortium of banks led by the State Bank of India to the tune of ₹ 899.35 crore.
Investigators alleged that the company secured and continued to avail large credit facilities by submitting falsified financial statements and manipulating its books of accounts.
The accused are suspected of diverting substantial loan funds obtained from banks for purposes unrelated to the sanctioned business activities.
The ED said its investigation revealed that the accused created a network of entities to facilitate fictitious sales and purchases, circular trading transactions and fake corporate guarantees.
These transactions were allegedly used to artificially inflate the company’s turnover,enhance its drawing power with banks and evergreen existing loans.
According to the agency,the proceeds of crime were subsequently diverted through related companies and personal bank accounts to conceal their origin and ownership.
The probe further found that a significant portion of the loan funds had allegedly been transferred to entities controlled by K.Venkateswara Rao without any apparent business rationale,raising suspicions of fund diversion and money laundering.
The ED has provisionally frozen bank accounts holding Rs.18 crore under Section 17(1A) of the PMLA and seized cash and gold jewellery collectively valued at Rs.1.27 crore.
Further investigation is underway to trace the money trail,identify additional beneficiaries and establish the extent of the alleged laundering of bank funds.
