ED restitutes ₹380-cr worth assets in cooperative bank 'fraud' involving ex MLA
₹ 380-cr worth assets in cooperative bank 'fraud' involving ex MLA
The case pertains to the Karnala Nagari Sahakari Bank Ltd. in Panvel where it was alleged that its erstwhile chairman, Vivekanand Shankar Patil, in connivance with other officials of the bank, "cheated" the lender and "siphoned off" the funds for private investments.
Patil, a four-time MLA of the Shetkari Kamgar Paksha Party, was arrested by the ED in June 2021.
The money laundering case of the ED stems from a February 2020 FIR filed by the Pune Police Economic Offences Wing .
The police alleged in its chargesheet that the then chairman Patil and other officials of the bank prepared 63 "bogus" loan accounts using "forged" documents without following the RBI guidelines and standard banking norms, and "siphoned off" ₹560 crore for personal gains, the federal probe agency said in a statement.
The ED said its probe found that funds were "diverted" to various entities "controlled" by Patil and his relatives.
"He purchased various properties and assets using the funds siphoned off from the bank and these proceeds of crime were utilised for the purchase of immovable properties at different locations in Raigad district of Maharashtra," it said.
These assets, worth ₹386 crore, were attached by the ED under two provisional orders issued in 2021 and 2023. The ED also filed a chargesheet in August 2021 before a special PMLA court in Mumbai.
The ED said the liquidator appointed by the RBI for the bank filed an application, under section 8 of the PMLA, before the court seeking restitution of assets.
The ED gave its consent, the agency said.
The court issued an order on July 22 directing the release of the property Karnala Sports Academy at Panvel to the liquidator and to put it up for auction, the ED said.
The court also ordered the Competent Authority to "realise" the land at Posari, Raigad by auction for distribution amongst the depositors.
"The bank had more than 5 lakh depositors having total deposits of ₹553 crore, and they lost their hard-earned money.
"In the larger interest of depositors and currently ongoing restitution efforts, ED took steps to expedite the process resulting in the restitution," the agency said.
The PMLA provides for the process of restitution even before completion of the court trial in order to provide succour to the victims of frauds like bank loans and Ponzi scheme cheating.
The fraud came to light after an audit was done at the instance of the Reserve Bank of India during 2019-20, when it was found that Patil was siphoning off funds from the bank through 67 "fictitious" loan accounts.
The funds were sent to the loan accounts of entities/firms/trusts owned or controlled by Patil including Karnala Charitable Trust, Karnala Sports Academy and Karnala Mahila Readymade Garments Cooperative Society Limited, the agency had claimed in a statement issued in October 2023.
This article was generated from an automated news agency feed without modifications to text.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Wire
3 hours ago
- The Wire
ED Issues Look Out Notice Against Anil Ambani: Report
A SEBI report allegedly found that R‑Infra, a Reliance Group company, had moved around Rs. 10,000 crore to other group companies through an undisclosed private entity without declaring it as a related party. New Delhi: The Enforcement Directorate (ED) has issued a lookout circular against businessman Anil Ambani, managing director of the Reliance Anil Dhirubhai Ambani (ADA) Group, according to a report by Hindustan Times. The agency is investigating allegations of loan fraud worth thousands of crores by his companies, sources told HT on August 1. The issuance of a lookout circular, or LOC, means that Ambani can no longer leave India without the permission of courts. As per the HT report, Ambani has also been summoned for questioning under the Prevention of Money Laundering Act (PMLA) on August 5. 'We have issued a LOC against Anil Ambani and issued summons to him on August 5 asking him to appear in Delhi for recording his statement under the PMLA in the loan fraud probe,' HT quoted an officer in the Enforcement Directorate (ED) as saying. The unnamed source also said that Ambani would likely be asked about various loans based on findings by the Securities and Exchange Board of India (SEBI), a statutory body under the government of India that regulates securities and the commodity market in the country. The HT report said that the ED searched the premises of 50 companies and 25 people, including senior executives, associated with the Reliance Anil Dhirubhai Ambani Group companies, last week. According to officials, the ED is looking into alleged financial irregularities and collective loan diversion amounting to more than Rs. 17,000 crore by multiple companies under the Group including Reliance Infrastructure (R Infra). According to The New Indian Express, a report by SEBI allegedly disclosed via ED sources accused R‑Infra of moving approximately Rs. 10,000 crore to group companies through an undisclosed private entity named CLE Pvt Ltd – without declaring it as a related party, possibly to avoid approvals from shareholders and audit panels – under the guise of inter‑corporate deposits, equity investments and corporate guarantees. According to the report, these transactions allegedly span across the financial years of 2013 to 2023, with total exposure to CLE reported at Rs. 8,302 crore by SEBI, and write‑offs reaching Rs 10,110 crore during the financial years (FY) 2017–21. Reliance ADA Group rejects allegations The Reliance ADA Group has, however, rejected these allegations, according to the TNIE report. A spokesperson of the Reliance Group said in a statement that the allegation regarding the diversion of ₹10,000 crore to an undisclosed party was a 10-year-old matter and that the company had stated in its financial statements that its exposure was only around Rs. 6,500 crore, the HT report said. As per the statement, R Infra had already publicly disclosed this matter on February 9 this year. 'Through mandatory mediation proceedings conducted by a retired Supreme Court judge and the mediation award filed before the Hon'ble Bombay High Court, Reliance Infrastructure arrived at a settlement to recover its 100 per cent exposure of ₹6,500 crore,' HT quoted the statement as saying. Per the report, the company also claimed that Anil Ambani had not been on the Board of Reliance Infrastructure for more than three years, since March 2022. The ED is also looking into allegations of illegal loan diversion of approximately Rs. 3,000 crore provided by Yes Bank to companies under the Reliance Group, Reliance Home Finance Limited and Reliance Commercial Finance Ltd, between 2017 and 2019. According to the HT report, ED officials had stated last week that Yes Bank promoters received money in their accounts just before the loan was granted to these companies. The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
New Indian Express
4 hours ago
- New Indian Express
Prosecution complaint filed against Saisree Engineers
HYDERABAD: The Enforcement Directorate, Hyderabad Zonal unit has filed a prosecution complaint before the Special Court for CBI cases, Hyderabad against M/s Saisree Engineers Pvt. Ltd (SEPL) and others under the provisions of Prevention of Money Laundering Act (PMLA). The agency has initiated investigation on the basis of an FIR registered by CBI's Economic Offences Wing (EOW), Chennai against M/s Saisree Engineers Pvt Ltd. and its management, bank officials, unknown public servants and others. Subsequently, CBI filed a charge sheet before the XXI Additional Chief Metropolitan Magistrate, Nampally, Hyderabad against M/s Saisree Engineers Pvt. Ltd and others. As per the FIR and charge sheet, M/s SEPL and its founder and managing director Sagiraju Suryanarayana Raju defrauded the State Bank of India by producing forged, fabricated documents and fictitious properties as collateral securities and also misled the bank about owners of the properties for availing credit facilities from the bank.
NDTV
5 hours ago
- NDTV
Probe Agency ED Raids Kerala Trust Over Rs 220 Crore Foreign Funds
The Directorate of Enforcement (ED), Kochi Zonal Office, conducted search operations on July 31, at two locations in Kasaragod, Kerala, under the provisions of the Foreign Exchange Management Act (FEMA), 1999. The searches were carried out in connection with suspected violations involving foreign contributions received by Kunhahmed Musliyar Memorial Trust and its Chairman, Ibrahim Ahmad Ali, a Non-Resident Indian (NRI). Preliminary investigations by ED revealed that the Trust had received over Rs 220 crore since 2021 from Ibrahim Ahmad Ali, recorded in its accounts as "unsecured loans." However, there were no loan agreements, interest terms, or repayment schedules in place, and no repayments have been made so far. The funds originated from M/s Universal Lubricants LLC, a UAE-based company. In the absence of proper documentation, and in light of clarifications under Section 2(1)(h) of the Foreign Contribution Regulation Act (FCRA), 2010, the transaction appears to qualify as foreign contribution. The Trust, however, is not registered under FCRA and lacks the required permission and designated FCRA bank account to lawfully receive such funds. ED further found that part of the foreign contribution was used to purchase agricultural land-another violation of regulatory provisions. Additionally, the Trust was found to have received Rs 2.49 crore in cash from Ibrahim Ahmad Ali, contravening FEMA norms. During the searches, ED seized incriminating documents, ledger records showing unsecured loans, the Trust's cash book, and a hard disk containing financial data. The case indicates significant contraventions of FEMA, 1999, and further investigation is ongoing.
