ED attaches assets worth Rs 2.43 crore in Blossoms Oils, Fats Limited case

As much as Rs 266.74 crore were then diverted for personal use through associate group companies, causing illegal financial losses to the banks.

HYDERABAD: The Hyderabad zonal office of the Enforcement Directorate (ED) has attached immovable properties worth Rs 2.43 crore (book value) under the provisions of the Prevention of Money Laundering Act, 2002, in connection with the Blossoms Oils & Fats Limited case. The attached properties, belonging to Sarvade Vinod Kumar and Jan Shakti Oil Products Pvt Ltd, represented by M Venkata Nagendra, include both residential and commercial assets.

The ED initiated its investigation based on an FIR registered by the CBI BS&FC, Bengaluru, under various sections of the Indian Penal Code against Blossoms Oils & Fats Limited and others. A chargesheet was filed by the CBI on February 19, 2019, in the Court of the XXI Additional Chief Metropolitan Magistrate-cum-Special Sessions Judge for CBI cases, Hyderabad.

Blossoms Oils & Fats Limited, its directors and associates were accused of defrauding Indian Overseas Bank (IOB) and Indian Bank by availing loans using forged documents. As much as Rs 266.74 crore were then diverted for personal use through associate group companies, causing illegal financial losses to the banks.

The ED investigation uncovered that the company, represented by its promoters and directors, including TG Suryanarayana, fraudulently availed credit facilities by presenting fabricated financial statements for 2012 and 2013, showing inflated cash reserves. They also submitted false monthly stock statements to mislead the banks.

Additionally, the company obtained 74 Letters of Credit (LCs) from the IOB and eight LCs from the Indian Bank using false and fraudulent documents. These LCs were issued in favour of associate/group companies, but no genuine business transactions or materials were involved. The funds from the loans and LCs were diverted for round-tripping through various companies to repay existing loans and to cover interest payments on devolved LCs.

The ED stated that these actions constituted scheduled offences under the PMLA, resulting in the generation of proceeds of crime, which were subsequently laundered and used for business and personal purposes.