Rs 346 crore fraud case: ED conducts searches in 11 premises; freezes Rs 55 lakh

Gurugram, Sep 12 In a Rs 346 crore bank fraud, the ED seized digital devices and incriminating documents during searches at 11 residential and commercial premises of Hythro Power Corporation Ltd (HPCL) and its officials in Delhi NCR, Bengaluru and Chennai, an official said on Friday.

The Gurugram Zonal Office of the ED conducted the search and survey operations on Wednesday under the provisions of the PMLA, 2002.

During search proceedings, several bank accounts belonging to the company’s promoters and related persons and having credit balances of more than Rs 55 lakh were also frozen, the ED official said in a statement.

The coordinated multi-city operations that targeted 11 residential and commercial premises related to HPCL were linked to siphoning off and diversion of public funds by the accused entity and its Directors Amul Gabrani and Ajay Kumar Bishnoi to their related entities, the ED said.

The siphoning off of the funds caused substantial losses to the banks, the ED said, adding that frauds declared by the complainant banks cost to Rs 346.08 crore during 2009 to 2015.

The ED initiated investigation on the basis of an FIR registered by the Central Bureau of Investigation (CBI) under penal provisions and Prevention of Corruption Act, 1988 provisions.

The accused were booked by the CBI for the commission of offences of criminal conspiracy, cheating and criminal misconduct, thereby, causing wrongful gain to themselves.

During the ED investigation it was revealed that HPCL, through its Promoters/Directors, obtained credit facilities from Punjab National Bank totalling Rs 168 crore, Union Bank of India Rs 56 crore, ICICI Bank Rs 78 crore and Kotak Mahindra Bank Rs 44 crore under a multiple banking arrangement.

The ED said that despite several restructurings, including conversion of invoked bank guarantees into funded interest term loans, HPCL defaulted, and the loans were declared a Non-Performing Asset (NPA), and later reported as a fraud to the Reserve Bank of India.

The alleged fraud caused significant financial losses for the banks involved, eroding trust in corporate lending practices, the ED said, adding that through the order of NCLT, liquidation proceedings of HPCL were initiated and the same are pending as on date.

The ED said during the course of search and survey proceedings, various digital devices and incriminating documents including Asset Valuation Reports, total receivable details of company (list of debtors), Loan advance details, Assets held in the company, Claims filed, Audited Financials, Tally Data, Legal records, details of investors and other important documents related to HPCL and its group/sister concerns GET Power, Tecpro Systems were recovered and seized.

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