Bengaluru: ED files prosecution complaint against 18 accused in Rs 122 crore bank fraud case

ED alleged, 'Funds were also diverted for the purchase of immovable properties and the settlement of loans of sister concerns/OTS with banks on behalf of sister concerns and revenue from the sale of stocks was not routed through the loan account.'

Bengaluru: The Enforcement Directorate (ED) on Wednesday said that its Bengaluru Zonal Office filed a prosecution complaint against 18 accused in a Rs 122-crore bank fraud case.

The prosecution complaint, equivalent to a police chargesheet, was filed against M/s Associate Lumbers Private Limited (ALPL) and 17 other accused in a money laundering investigation on September 12 before the Special Court (PMLA), Bengaluru.

ED initiated an investigation based on an FIR registered by the CBI, ACB, Bengaluru, against M/s ALPL, its directors and others under various sections of IPC, 1860 and Prevention of Corruption (Amendment) Act, 1988.

“ED investigation revealed that the company M/s Associate Lumbers Pvt Ltd, represented by its directors viz, Mohamed Farouk Suleman Darvesh, Manoharlal Satramdas Agicha, Srichand Satramdas Agicha, Ebrahim Suleman Darvesh entered into criminal conspiracy by siphoning off the loan amount sanctioned by the Union Bank of India (erstwhile Corporation Bank) to either the sister concerns of M/s ALPL in form of unsecured loans or to other firms for purchase of property in the name of M/s ALPL and M/s Touchwood Real Estate Private Ltd. etc., thereby causing loss to the Union Bank of India to the tune of Rs 56 crore (approx) as on date of NPA and total loss to the Bank is Rs 122 crore (approx) including interest as on date of complaint filed by the Bank,” the agency said.

ED further alleged that M/s. ALPL had made numerous ‘accommodative entries’ without any genuine business relationship with its sister concerns solely to enhance its drawing power (DP) by inflating its turnover.

“Consequently, M/s ALPL obtained renewed credit facilities of Rs 60 Crore from the complainant bank. Therefore, it is concluded that M/s. ALPL and its sister concerns engaged in accommodative entries that facilitated the renewal of the credit facilities of M/s. ALPL was based on inflated turnover and also facilitated the diversion of loan proceeds to sister concerns."

“Further, funds were also diverted for the purchase of immovable properties and the settlement of loans of sister concerns/OTS with banks on behalf of sister concerns and revenue from the sale of stocks was not routed through the loan account. Also, stock worth Rs 7 crore (approx) was disposed of by directors and claimed as washed away in Chennai floods. Further, funds have also been diverted to entities in Panama and Costa Rica, which are controlled by relatives of one of the Directors of ALPL, as an advance payment for the import of timber. Through such criminal activities, accused persons generated and acquired POC in crores of rupees,” ED alleged.