BENGALURU: The Directorate of Enforcement (ED), Bengaluru Zonal Office searched different premises of persons and entities related to Deepak Cables (India) Ltd (DCIL) on May 21 and 29 in a case related to cheating of a consortium of banks to the tune of Rs 899.35 crore.
During the search operations, incriminating documents belonging to DCIL, K Venkateswara Rao, director of DCIL, Mahesh Agarwal (Kolkata), director of Adhunik Corporation Ltd, and others were seized under provisions of the PMLA, 2002. ED seized gold (jewellery) and cash amounting to Rs 1.27 crore and provisionally froze various bank accounts totalling Rs 18 crore.
ED initiated the investigation based on an FIR registered by the CBI against DCIL and its director, K Venkateswara Rao, and others, for allegedly cheating a consortium of banks led by SBI by obtaining large credit facilities and diverting the loan funds. The company allegedly submitted falsified financial statements and manipulated books of accounts to secure and continue availing bank loans.
The investigation revealed that the accused used multiple entities for fictitious sales and purchases, circular trading and issuance of fake corporate guarantees. These transactions were utilised to artificially inflate turnover, increase drawing power from banks, evergreen existing loans, and divert the proceeds of crime through related companies and personal accounts, concealing their illicit origin.
It was also found that huge amount of loan funds were diverted to the related entities under the control of K Venkateshwara Rao without any business rationale and doubtful purpose. The searches were conducted Section (u/s) 17 of the Prevention of Money Laundering Act (PMLA), 2002.