NEW DELHI: The Enforcement Directorate (ED) has attached properties worth Rs 132.85 crore belonging to Ushdev International Limited in Mumbai and Raigad districts in connection with an alleged bank fraud of around Rs 1,438 crore, the agency said on Friday. The attachments were made under the Prevention of Money Laundering Act (PMLA), 2002.
The ED initiated its probe on the basis of an FIR registered by the Central Bureau of Investigation (CBI) in Mumbai under various sections of the Indian Penal Code, 1860. The FIR was based on a complaint filed by the State Bank of India (SBI) on behalf of an SBI-led consortium of banks, alleging a bank fraud of approximately Rs 1,438 crore.
Investigations revealed that the accused persons fraudulently availed of cash credit facilities, Letters of Credit (LCs) and Buyers’ Credit by submitting forged and fabricated trade documents without any genuine underlying business transactions.
“On this basis, consortium banks were induced to release funds. It was found that the LC proceeds were received by shell and controlled supplier entities, which were used merely as conduits,” the agency said.
The funds were subsequently layered through multiple intermediary entities and routed back to Ushdev group companies, creating circular transactions without commercial justification.
Further investigation revealed that a significant portion of the cash credit funds was diverted to related entities under the guise of advances. These entities were found to be dormant or not engaged in genuine business activities. The funds were ultimately routed to Uttam Galva Group companies, indicating layering and diversion of proceeds of crime.
“It was also found that fraudulently obtained LC proceeds were utilised to repay Buyers’ Credit facilities, which financed imports that were re-exported to overseas related entities. The export proceeds were not repatriated to India and, wherever realised abroad, were diverted to overseas subsidiaries and connected entities,” the agency added.
With the latest action, the ED has so far attached properties worth Rs 176.37 crore in the case.
Further investigation is under way.