Enforcement Directorate raids Bengaluru firm in Rs 899 crore bank fraud case

Bengaluru: The Enforcement Directorate (ED) on Monday said that it raided a company in Bengaluru that allegedly cheated banks of Rs 899 crore. 

The search operations were held at various premises of the people and entities related to M/s Deepak Cables (India) Limited on May 21 and 29. 

During the search operations, various incriminating documents, belonging to M/s Deepak Cables (India) Limited; K Venkateswara Rao, Director of M/s Deepak Cables India Ltd (DCIL); Mahesh Agarwal (Kolkata), Director of M/s. Adhunik Corporation Ltd, and others were seized under the provisions of the PMLA, 2002, the agency said. 

ED seized gold jewellery and cash amounting to Rs 1.27 crore and provisionally froze various bank accounts containing Rs 18 crore. 

ED initiated an investigation on the basis of an FIR registered by the CBI against M/s Deepak Cables India Ltd (DCIL) and its Director, K Venkateswara Rao and others, for allegedly cheating a consortium of banks led by SBI to the extent of Rs 899.35 crore by obtaining large credit facilities and diverting the loan funds.  "The company allegedly submitted falsified financial statements and manipulated books of accounts to secure and continue availing bank loans.

ED investigation revealed that the accused used multiple entities for fictitious sales and purchases, circular trading, and issuance of fake corporate guarantees. "These transactions were utilized to artificially inflate turnover, increase drawing power from banks, evergreening existing loans, and divert the Proceeds of Crime through related companies and personal accounts, thereby concealing their illicit origin.

"It was also found out that a huge amount of loan funds were diverted to the related entities under the control of K Venkateswara Rao without any business rationale and for doubtful purpose," the agency said.