NEW DELHI: The Enforcement Directorate (ED) on Tuesday attached movable and immovable assets worth Rs 263.10 crore in the form of land, residential properties, shares, bank balance, foreign currency receivables and luxurious cars in a bank loan fraud case pertaining to Hyderabad-based Deccan Chronicle Holdings Limited (DCHL) for causing a total loss of Rs 1,161.93 crore to six public sector banks namely Canara Bank, Andhra Bank, Indian Overseas Bank, Central Bank of India, Corporation Bank and IDBI Bank.
The case under Prevention of Money Laundering Act (PMLA) was initiated following FIR registered by Banking Securities and Fraud Cell (BS&FC), Bangalore against DCHL, its management and others invoking Sections 120-B (criminal conspiracy), 420 (cheating), 468 (forgery) and 471 ((using as genuine forged document) of the Indian Penal Code (IPC) for causing wrongful loss of Rs 357.77 crore to Canara Bank.
The CBI had also registered five more FIRs in respect of loss caused to five other public sector banks and filed six chargesheets against DCHL, its management and others for causing total wrongful loss of Rs1,161.93 crore to the six PSU banks.
“Investigation conducted by ED revealed that DCHL had availed loans for working capital, purchase of capital goods and short term loans by overstating the receivables, under-stating huge loan liabilities by furnishing fabricated financial statements and not disclosing the loans taken from other banks/NBFCs,” the ED said in a statement.
The DCHL had in all availed 111 loans amounting to Rs 10,000 crore from 16 different banks during the period 2004 to 2012. Out of such loans, an amount of Rs 2800 Crore was outstanding to various banks as on September 30, 2012 excluding interest. Such loan amounts were used for other than the specified purposes such as investing in 20 group companies/firms, acquiring companies with huge premiums, payments to Airbus towards purchase of cargo aircraft, payments to BCCI for Indian Premier League franchisee of ‘Deccan Chargers’, payments towards dividends declared by DCHL, buy-back of shares, issue of bonus shares, purchase of luxurious cars in the name of associates/group companies, repayment of earlier loans taken among others, the agency said.
“The group companies of DCHL acquired movable and immovable properties with the loan funds received from the parent company (DCHIL) and not disclosed the same in the audited balance sheet of the companies concerned with a view to obscure the identity of such properties which is nothing but money laundering,” the agency statement further said.
“Investigation conducted by the ED also revealed that the loan funds used for purchase of retail franchisee by name ‘Odyssey’ were received back by the promoters at a later date. To show rosy picture in the eyes of investors/banks, DCHL had declared dividends, issued bonus shares, bought-back shares by investing an amount of around Rs 230 crore and the promoters of DCHL also received Rs 143 crore as dividends by using loan proceeds which later became NPA to Banks. Even though the amounts payable were more than Rs.1160 crores for six public sector banks, DCHL and its management resorted to purchase of movable/immovable properties in their group companies and in the name of their family members and did not inform the banks with an intention to obscure such properties,” the statement further added.
During the course of investigation, various movable and immovable properties worth Rs 263.10 crore were identified and the same have been now attached vide Provisional Attachment Order No 03/2017 dated 28.03.2017. The properties attached now by Enforcement Directorate are other than the properties pledged to banks/ NBFCs by DCHL which are under attachment / taken over under SARFAESI Act/ DRT Proceedings, the agency added.