The Enforcement Directorate (ED) has arrested Vuppalapati Satish Kumar, Managing Director (MD) of Prithvi Information Solutions Limited (PISL), for money laundering and causing a loss of around Rs 3,316 crore to a consortium of public sector banks, the agency said on Thursday.
Kumar is accused of causing loss to the consortium of banks with the connivance of his sister Hima Bindu B., MD of VMC Systems Limited, a Hyderabad-based telecom equipment manufacturer. He was arrested on August 12 under the Prevention of Money Laundering Act (PMLA), 2002.
The ED initiated a money-laundering investigation on the basis of an FIR filed by the Central Bureau of Investigation (CBI) against VMC Systems Limited (VMCSL), which had taken loans from a consortium of banks and the present dues outstanding to all the banks is worth Rs 3,316 crore, said the ED in a statement.
The CBI had registered FIR against VMCSL and its promoters -- Vuppalapati Hima Bindu, Vuppalapati Venkat Rama Rao and Bhagavatula Venkat Ramanna -- in a case of criminal conspiracy, cheating and forgery in September 2018.
"Forensic audit revealed that VMCSL circulated loans to various related entities to inflate its books of accounts," said the ED.
"Forensic audit further revealed that VMCSL had opened various Letters of Credit (LCs) worth Rs 692 crore in the name of fake and dummy entities, which were subsequently devolved."
The federal agency said that Kumar through his company PISL and Ennar Energy Limited and with the active assistance of Hima Bindu, in order to dodge the banks, created false or exaggerated operational revenues by generating fake sales and purchase invoices through the companies controlled by their family members.
Kumar and Hima Bindu siphoned off a part of proceeds of crime by remitting it to the overseas entities controlled by their family members, said the ED.
"Although Kumar claimed that he had no link with the Non-Performing Asset (NPA) of VMCSL, but more than 40 Hard disks of VMCSL were recovered from his residence during the search carried out by ED on July 20 this year," the ED said.
On forensic examination of digital devices, the agency said, it was found that Kumar was indulged in Benami transactions and involved in efforts to transfer fraud amounts to off-shore entities.
"He was non-cooperative during the investigation and was not supplying documents of his own business entities on one pretext or the other."
After Kumar's arrest on August 12, the agency said, he was produced before the PMLA Special Court and the court granted 10 days custody to ED.
Earlier, the ED mentioned, Hima Bindu was arrested under PMLA and was given ED custody till August 18. "Further investigation is under progress."
( With inputs from ANI )
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