The Directorate of Enforcement (ED) executed search operations at seven locations in Bengaluru and Davangere, Karnataka, under the Prevention of Money Laundering Act, 2002 (PMLA). The target of these operations was M/s Bharath Infra Exports and Imports Ltd, along with its associated entities, in connection with a bank fraud case.
M/s Bharath Infra Exports and Imports Ltd had obtained various loan facilities, including cash credit, EPC/FBD, non-fund-based working capital, and letters of credit from the State Bank of India, Bengaluru City branch.
However, the account of this entity was classified as a Non-Performing Asset (NPA) on January 17, 2017, due to non-payment of the bank’s dues, amounting to INR 113.38 Crore.
The ED’s investigation revealed that the promoters and directors of M/s Bharath Infra Exports and Imports Ltd misappropriated the credit facilities from the State Bank of India by diverting funds and loans to related parties. They also submitted forged or fabricated invoices and documents to the bank, as well as wrote off sales without fulfilling contractual obligations.
During the course of the investigation, it was discovered that INR 101.18 Crore was illicitly transferred by the accused through 10 Letters of Credit (LCs) issued to M/s Aradhya Wire Ropes Pvt. Ltd. These funds were subsequently routed through various other entities’ bank accounts.
In several instances, payments were made to transport contractors and agents who provided fake vehicle details and invoices to M/s Bharat Infra Exports and Imports Ltd and M/s Aradhaya Wire Ropes Pvt. Ltd without any actual movement of materials at the site.
As a result of the search operation, immovable properties worth approximately INR 100 Crore were unearthed, and a sum of INR 14.5 lakhs in cash was seized. Furthermore, incriminating documents, digital devices, and bank accounts belonging to the implicated entities were frozen and confiscated.
The ED continues to investigate the case under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
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