JOIN USAn engineer from Bengaluru and a man from Chennai have been arrested by the Enforcement Directorate (ED) in relation to the investigation into shell companies they launched four days ago.
The suspects are G Dhananjay Reddy, a Bengalurean, and K Liakath Ali of Chennai. Reddy is accused of floating 20-odd shell companies to get a Rs 70-crore bank loan while Ali faces the charge of remitting foreign exchange to the tune of Rs 78 crore out of India through shell companies.
Reddy, an engineering graduate in Industrial Production, is said to have masterminded floating of shell companies to obtain bank loans through “dubious means”, the ED said in a statement. He submitted forged documents of several immovable properties as third party collateral to banks, including Union Bank of India, and got loans sanctioned in the name of various shell companies, it added. “He had transferred the funds from various shell companies located in India to the companies floated by him outside India (in Dubai, UAE, etc),” the ED said, adding he did round-tripping of funds and evaded tax.
Reddy was also a “wilful defaulter” who utilised the loan for the purpose other than which it was sanctioned for. “All the companies floated by him were only on paper and never existed. There are three money laundering cases registered against him and it is revealed in the investigation that many shell companies were floated by him to defraud the banks,” the ED said.
Ali is accused of remitting foreign currency through shell companies using fake documents. He was involved in cheating Indian Bank using eight shell companies. He remitted $11,778,120 (Rs 78 crore) out of India against forged Bills of Entry without effecting any actual imports, the ED said. The matter came to light after Indian Bank alerted Chennai customs which confirmed the fabrication of bills.
The investigation found out that Ali and his brother Eliyas Peer Mohamed ran shell companies named Galaxy Impex, Green International, Snow City & Co and so on. They allegedly opened fictitious bank accounts using multiple PAN cards and driving licences obtained by a person with minor variations in his name. It was found that 24 of the 25 tranches of outward remittance by Galaxy Impex were made by filing forged bills.