BENGALURU: The Directorate of Enforcement (ED), Bengaluru Zonal Office, has provisionally attached immovable properties worth around Rs 51.28crore (having market value of over Rs 150crore) in a bank fraud, diversion and siphoning of loan funds case by Deepak Cables (India) Ltd (DCIL), its managing director K Venkateshwara Rao, director Satyavathy Ball, and their associated entities under the Prevention of Money Laundering Act (PMLA).
The ED, in an official release on Thursday, stated that it had initiated money laundering investigation on the basis of an FIR registered by the CBI, Banking Securities Fraud Branch (BS&FB), Bengaluru. The scheduled offences relate to criminal conspiracy, cheating, forgery, use of forged documents and criminal misconduct resulting in wrongful loss to consortium banks.
“The investigation under PMLA revealed that DCIL and its promoters fraudulently obtained and enjoyed various credit facilities from consortium banks by submitting manipulated financial statements, inflated stock statements and false debtor statements,” the central agency stated.
“The investigation further established that the accused persons diverted and siphoned off bank loan funds through a network of related companies, including Surya Transmission Ltd, Adhunik Power Transmission Ltd, Dandeli Ferro Pvt Ltd, Sharavathy Conductors Pvt Ltd, Venkatesh Industries, Maruthi Engineering Works, Universal Transmission Line Products, KGN Electricals and other connected entities by creating fictitious sale and purchase transactions without actual movement of goods,” added the ED.
The agency further added that the “loan proceeds were diverted for purposes unrelated to the sanctioned objects of the loans, including buy-back of equity shares from private equity investors through related entities and acquisition of assets”.
The ED had earlier conducted searches under Section 17 of the PMLA at multiple premises connected with the accused persons and their associates, during which “several incriminating documents, digital devices and records” were seized.
“Subsequently, Rao was arrested under Section 19 of the PMLA on June 2, and remanded in ED custody. Statements of several accused persons, bank officials and other witnesses were recorded under Section 50 of the PMLA during investigation.
Investigation further revealed that properties directly acquired from the Proceeds of Crime (PoC) as well as equivalent value properties held in the names of accused persons, their family members and connected entities were identified,” the ED stated. “Since a substantial portion of the PoC had been layered, diverted or could not be directly traced, equivalent value properties have also been provisionally attached under the provisions of PMLA to safeguard the PoC and prevent frustration of confiscation proceedings,” added the agency.
