Mumbai, Nov 17 The Directorate of Enforcement (ED), Mumbai Zonal Office, has initiated the process for restitution of three seized immovable properties worth Rs 55.85 crore in a Rs 694 crore bank loan fraud case involving Varron Aluminium company, an official said on Monday.
These assets were provisionally attached by the ED under Section 5 of the Prevention of Money Laundering Act (PMLA), as Varron Aluminium Private Limited and other group companies/persons had cheated and siphoned off the bank funds for their personal benefits, the official said in a statement.
The value of the assets is based on exercise done in 2021, the ED said, citing the State Bank of India’s report.
The ED initiated an investigation based on FIRs registered by the CBI against Varron Aluminium and others for defrauding Bank of India and State Bank of India to the tune of Rs 293.74 crore and Rs 401.25 crore, respectively.
It was alleged in its chargesheet that a Manual Letter of Credit of Rs 300 crore was issued by Canara Bank on behalf of VAPL in favour of its group company VACPL, and the same was discounted by Bank of India against fake documents without proper verification.
The ED investigation revealed that payment of every Letter of Credit was made by opening a new Letter of Credit in favour of VAPL, VIPL and other shell entities, and the said process was adopted since the opening of the very first Letter of Credit.
Credits were taken cyclically to repay old loans, to reduce cash credit liability availed by VAPL and group companies from other banks and to inflate the books of accounts, the ED said.
During the investigation, the ED identified the Proceeds of Crime (POC) and issued two Attachment Orders for the attachment of immovable properties worth Rs 179.27 crore in total.
The provision of Section 8(8) of the PMLA mandates for restitution of attached/confiscated properties to the rightful owners/ legitimate claimants and victims of money laundering.
The attached asset has to be utilised for the objective of restoration of assets to rightful owners when it is determined that the properties have been acquired through illicit means but legally belong to innocent parties.
The ED has been making continuous efforts for restitution of properties to the rightful owners/legitimate claimants and victims of money laundering and encourages all affected parties, including Banks and other financial institutions, to use the provision of Section 8(8) of PMLA, for restitution of properties, attached/ confiscated by ED and restoration of their claim in respect of such properties.
Due to the continuous efforts taken by the ED for restoration of claims of legitimate claimants, SBI filed a miscellaneous application in the Special Court, under Section 8(8) of PMLA, for claiming three attached properties worth Rs 55.85 Crore, as per the valuation done in the year 2021.
In pursuance of the afore-mentioned objectives, during the court proceedings, the ED filed an affidavit before the Special PMLA Court, Mumbai, expressing its willingness for restitution of the attached properties claimed by SBI through its miscellaneous application.
The Special Court PMLA, vide Order dated September 26, has allowed the application of SBI and ordered the restoration of three immovable properties valued at Rs 55.85 crore to it.
--IANS
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