CHENNAI: Gold Palace, the prime property of Saravana Stores in T Nagar, has been attached by Enforcement Directorate (ED) for defrauding Indian Bank in a case pertaining to money laundering. The property is worth Rs 234.75 crore.
The ED initiated the probe under the Prevention of Money Laundering Act on May 26, 2022, based on an FIR dated April 25, 2022, registered by the CBI (Economic Offences Wing). It is alleged that the partners of Saravana Stores (Gold Palace)—Pallakudurai (deceased), P Sujatha and YP Shiravan—cheated the bank by fabricating balance sheets and projecting sound financial health of the firm while seeking loan from the bank.
ED in a statement said, “There is a huge mismatch between the sales reported and credit entries of the firm. The firm has presented a cosmetic picture of expected turnover for upcoming financial years at the time of availing loan. Further, to cheat Indian Bank, a significant wrongful loss and deriving personal gain, the firm in collusion with Property Valuer, Bank officials, and certain persons proposed to purchase assets at a price, which is much higher than the real fair market value.”
Investigation revealed that the trio overstated the inventory, transferred the assets without the knowledge of the bank, used the Open Cash Credit (OCC) limits to repay the term loan, misappropriated and diverted the funds for which it was not sanctioned, and committed other irregularities causing wrongful loss to the bank. The company has generated Rs 240 crore out of criminal activities, the statement added.