Bank Loan Fraud Case: ED Attaches Over Rs 480 Crore Assets of Basmati Rice Processing Firm
In 2016, the Enforcement Directorate (ED) had lodged a money-laundering case against the company, which claims to be the world's largest basmati rice processing firm.
File photo of Enforcement Directorate
New Delhi: The ED on Thursday said it had attached assets worth over Rs 480 crore of REI Agro Ltd, a prominent basmati rice processing company, in connection with a multi-crore-rupee bank loan fraud case.
The central agency issued a provisional attachment order under the Prevention of Money Laundering Act (PMLA) against the firm, it said in a statement. In 2016, the Enforcement Directorate (ED) had lodged a money-laundering case against the company, which claims to be the world's largest basmati rice processing firm.
The alleged bank loan fraud is pegged at Rs 3,871.71 crore and it is being probed by the Central Bureau of Investigation (CBI) too.
The attachment worth Rs 481.04 crore largely comprises land, buildings, plants and machinery of the rice mill unit of the company, office space held by its controlled companies and wind farms owned by REI Agro Ltd, according to the statement.
Fifty per cent share of the immovable properties held by four companies of the Fortune Group based at Kolkata had also been attached, the agency said.
It added that the company and its directors -- Sandip Jhunjhunwala, Sanjay Jhunjhunwala -- and others had availed credit facilities from various banks under a consortium arrangement that included the UCO Bank flagship corporate branch and had defrauded the banks from 2013 onwards.
The alleged fraud, to the tune of Rs 3,871.71 crore, was perpetrated by fraudulently diverting the funds for purposes other than those for which the same were sanctioned, the ED said.
It said Sandip Jhunjhunwala, who was arrested by the agency in the case, and others "diverted" the funds, sanctioned as working capital loan by 14 banks under the consortium led by UCO Bank, using different modus operandi including trading in bogus and fake bills, investing in Varrsana Ispat Pvt. Ltd directly and through controlled companies, setting of higher amount of capex advances given to various shell companies, showing a higher cost of construction and by way of arranging fake purchase bills among others.
Sandip Jhunjhunwala, the ED alleged, also illegitimately diverted the funds to the tune of about Rs 600 crore through Kolkata-based shell companies to the accounts of associated companies or companies controlled by him using banking channels.
The agency had attached assets in the case in the past also and with the latest order, the total value of the attachment stands at Rs 1,065.77 crore.
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