Karnataka: ED attaches properties worth Rs 105.5 crore in Bank fraud case
Sep 05, 2023
Bengaluru (Karnataka) [India], September 5 : The Directorate of Enforcement (ED) provisionally attached properties worth Rs 105.5 crores belonging to Bharath Infra Exports and Imports Ltd and others in a bank fraud case, stated a release on Monday.
The attached immovable and movable properties include, residential sites, commercial properties and a farmhouse located in Bengaluru worth Rs 104.90 Crores, and seized cash worth Rs. 14.5 lakhs.
Earlier, the Central Bureau of Investigation (CBI), Bank Securities Fraud branch, Bangalore, registered a FIR against M/s Bharath Infra Exports-Import Pvt Ltd and its promoters/directors, under various sections of IPC, 1860 and Prevention of Corruption Act, 1988, alleging that the company was engaged in the trade of construction materials and availed cash credit limits from the State Bank of India.
It is alleged that later the cash credit account of the entity was classified as a Non-Performing Asset (NPA) on January 17, 2017, due to non-repayments of the bank’s dues/outstanding of Rs 113.37 Crore.
The ED investigation revealed that Bharath Infra Exports and Imports Ltd opened 10 LCs (Commercial Letters of Credit) in FY 2016-17, and thereafter, transactions were made fraudulently to convert the Non-Fund Based LC to increase fund-based Cash Credit availability in the bank accounts of other companies.
According to ED, Bharath Infra Exports and Imports Ltd also indulged in circular trading and falsely showed increased turnover in the companies M/s Aradhya Wire Ropes Pvt Ltd, M/s Aradhya Steel Pvt Ltd, M/s Vedik Ispat Pvt Ltd, M/s Bhavani Steel Corporation and M/s Speigel Enterprises Pvt. Ltd.
The investigation further revealed that the funds were initially credited to the bank account of M/s Aradhya Wire Ropes Pvt. Ltd and then routed through other companies bank accounts and finally returned back to M/s Bharath Infra Exports and Imports Ltd.
Further investigation is underway.
Earlier in June, ED carried out search operations at seven locations in Bengaluru and Davanagere belonging to Bharath Infra Exports and Imports Ltd and its related entities in the case under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
