Mumbai, Jan 4 The Directorate of Enforcement (ED), Mumbai Zonal Office, conducted extensive search operations on January 2 at 14 locations across Mumbai and Delhi in connection with a Rs 4,957 crore loan fraud case involving M/s Pratibha Industries Limited and its associates, a statement by the ED said on Saturday.
The raids were carried out under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
In an official statement, the ED revealed that the operation resulted in the freezing of bank balances and mutual funds worth Rs 5.4 crore, along with the recovery of incriminating evidence related to the acquisition of immovable properties.
The case originated from an FIR filed by the Central Bureau of Investigation (CBI) based on a complaint lodged by the Bank of Baroda. The complaint alleged that M/s Pratibha Industries Limited, along with its director Ajit Kulkarni and others, orchestrated a massive bank fraud by deceiving a consortium of lenders to the tune of Rs 4,957 crore.
According to the ED, the promoters and directors of M/s Pratibha Industries Limited engaged in a criminal conspiracy to siphon off loan funds, resulting in significant financial losses for the banks while securing undue gains for themselves. “They allegedly accomplished this by diverting loan funds through fraudulent transactions and circular trading practices,” the statement said.
The ED investigation further uncovered that the promoters utilized the services of accommodation entry providers to layer and conceal the funds. This was done through a network of bogus entities and suspicious third-party transactions, which were then used to acquire immovable assets.
The ED has said that the investigation is still going on and aims to uncover the full extent of the money laundering activities, including identifying all beneficiaries and tracing the siphoned funds.
The accounts of the Pratibha Industries were classified as NPA on December 31, 2017. Subsequently, the accounts were also declared as fraud by the members of the consortium banks.
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