HYDERABAD: The Enforcement Directorate (ED) has provisionally attached movable and 290 immovable properties including about 2,050 acre of agricultural land, worth Rs 63.05 crore belonging to Telangana-based GS Oils Limited and its associate companies in a case of cheating SBH bank. This is the second provisional attachment order issued in this case.
The ED initiated money laundering investigations on the basis of an FIR registered by CBI, Bengaluru under various sections of the IPC 1860, against G S Oils Limited, its associate companies, its directors for cheating and causing wrongful loss to the erstwhile State Bank of Hyderabad.
An investigation by ED revealed that GS Oils Limited had availed various credit facilities from SBH and UCO Bank such as cash credit, term loans, and Letters of Credit (LC). All such credit facilities have turned into Non-Performing Assets (NPA).
Loans were round-tripped, parked into various associate companies, and subsequently either withdrawn in cash or utilised for purchasing lands in the name of associate companies, which were again mortgaged for more loans.
The ED said that it found large amounts of the banks’ funds were diverted by fraudulently issuing LCs to related shell firms for bogus supply of material. These LCs were devolved and the said funds were illegally channeled back to their promoters, ultimately causing huge financial losses to the banks.
In this manner, GS Oils acquired properties worth Rs 306.33 crore. Additional assets which were used to acquire loans from the banks have been identified and the second attachment order has been issued attaching agricultural lands of around 2,050 acres of land in Adilabad.
Loans were misutilised
GS Oils Ltd took credit facilities from SBH and UCO Banks and utilised these for buying lands in the name of associate firms