HYDERABAD: The Hyderabad zonal unit of the Directorate of Enforcement (ED) has provisionally attached immovable properties worth `48.71 crore under the provisions of the Prevention of Money Laundering Act-2002 in a bank fraud case being investigated against M/s Transstroy India Ltd. and others.
It may be recalled that the ED began investigating the alleged fraud following an FIR registered by the ACB-CBI, Hyderabad, under various sections of IPC, 1860 and Prevention of Corruption Act, 1988.
According to the FIR, Transstroy availed loans and credit facilities from a consortium of banks but did not utilise the funds for the stated purpose. These loan accounts were deemed Non-Performing Assets (NPAs) due to persistent irregularities by the company, frequent devolvement of Letters of Credit (LCs), non-payment of interest on working capital limits and non-routing of operations through the consortium of banks. The borrowed funds were allegedly diverted to its group companies, shell entities, entities owned / controlled by the promotors/directors and several unrelated entities.
Investigation revealed that Transstroy and its directors/promoters, by showing fictitious high turnover with the help of bogus sales and purchase transactions with its own associated entities and shell entities, availed credit facilities from time to time and diverted the funds fraudulently by way of opening accommodated LCs which led to the devolvement of the LCs, and caused loss to the extent of Rs 5,115 crore (including interest) to the banks.
Investigation revealed that the directors/promoters floated several shell entities and appointed their employees as dummy directors in such entities which were used for diversion and layering the proceeds of crime. It was also revealed that cars and two-wheelers were reflected in the bogus invoices as transportation vehicles for transport of steel in tonnes.
ED investigation further revealed that around `85.90 crore was withdrawn in cash from the bank accounts of Transstroy and related entities and utilized by its promoters / directors for their personal gains.
It was also revealed that immovable properties acquired out of proceeds of crime were gifted and transferred to family members with an intent to prevent their attachment by the law enforcement agencies. The attached properties include land parcels gifted and transferred by one of the directors to his family members as well as residential premises of entry provider who was involved in the diversion of funds on commission basis.