ED attaches Rs 48.71 cr properties in Transstroy India bank fraud case

Hyderabad Desk

Hyderabad: The Directorate of Enforcement (ED), Hyderabad has provisionally attached immovable properties in the form of land parcels and residential premises worth Rs 48.71 crore under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in an alleged bank fraud case being investigated against M/s Transstroy India Ltd (TIL) and others.

The ED initiated an investigation based on an FIR registered by the ACB, CBI, Hyderabad under various sections of IPC, 1860 and the Prevention of Corruption Act, 1988.

TIL allegedly availed loans and credit facilities from a consortium of banks but did not utilise the funds for the availed purpose. These loan accounts turned NPA due to alleged persistent irregularities by the company, frequent devolvement of Letters of Credit (LCs), non-payment of interest on working capital limits and non-routing of operations through consortium banks.

The borrowed funds were diverted to its group companies, shell entities, entities owned/controlled by the promoters/directors and several unrelated entities.

The ED investigation revealed that TIL and its directors/promoters allegedly showed fictitious high turnover with the help of bogus sales and purchase transactions with its own associated entities and shell entities.

This allowed them to avail of credit facilities, and divert the funds fraudulently by way of opening accommodated LCs which led to the devolvement of the LCs, and caused a loss of Rs 5,115 crore (including interest) to the consortium of banks.

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The ED maintained that its investigation revealed that directors/promoters of TIL floated several shell entities and appointed their employees as namesake/dummy directors in such entities which were used for diversion and layering the proceeds of crime.

It was also revealed that vehicles in the category of LMV/2 wheelers were reflected in the bogus invoices as vehicles for the transport of steel in tonnes.

Further, around Rs 85.90 crore was withdrawn in cash from the bank accounts of TIL and related entities and the same was utilized by its promoters/directors for their gains.

Immovable properties acquired out of proceeds of crime were gifted and transferred to family members with the intent to prevent their attachment by law enforcement agencies. The attached properties include land parcels gifted and transferred by one of the directors to his family members as well as residential premises of an entry provider who was involved in the diversion of funds on a commission basis. Further investigation is under progress.


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