BENGALURU: The Directorate of Enforcement (ED) has provisionally attached assets worth Rs 255.17 crore of managing director of Sree Kanva Souhardha Cooperative Credit Limited (SKSCCL) and Kanva Group of Companies N Nanjundaiah, his family members and other entities under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA), in a case related to cheating of investors, said an ED spokesperson.
According to the agency, the attached assets are in the form of immovable properties like agricultural and non-agricultural land, buildings and resorts, and movable properties in the form of bank balances in the name of Nanjundaiah, his family members and others.
“The ED initiated investigation under PMLA after receiving a complaint from the Registrar of Cooperative Societies, Bengaluru, and FIRs registered at Basaveshwara Police Station against Nanjundaiah, under Section 420 IPC, alleging that the company collected Rs 650 crore in deposits from the public.
It assured them of high rate of interest through commission agents, without maintaining required liquidity,” said the ED spokesperson. “The accused advanced loans out of deposits, working capital, shares, reserves etc without getting any security or following rules and regulations,” he added. The ED had conducted searches in the premises of the accused, and seized incriminating documents. Nanjundaiah was arrested on August 25 under the PMLA.
Investigation revealed that Nanjundaiah had collected Rs 650 crore through unauthorized collection centres and agents from about 13,000 gullible investors, by luring them with 12-15 per cent rate of interest. “The accused manipulated SKSCCL accounts and suppressed the financial position of the society, which was under loss but was projected as profit. They did not follow due procedure while collecting deposits or extending loans, making recovery close to impossible. Huge amounts of money were spent on collection agents, centres, staff salary and other perks,” the ED stated.
“The accused maintained low liquidity in SKSCCL accounts and made dubious entries wherever required in the cloud-based Zenith software. More than Rs 400 crore was swindled, diverted and advanced as loans without surety to Kanva Group of Companies. The latter availed Rs 120 crore in loans from various banks and financial institutions, which are also outstanding,” the agency said.
Money was also transferred to various accounts of Kanva Group, the accused and his family members. From this, the accused acquired more than 160 immovable and movable properties, and some of the properties have already been sold to further the layering of embezzled money.