Mumbai, Nov 17 (NationPress) The Directorate of Enforcement (ED), Mumbai Zonal Office, has begun the process to return three confiscated immovable assets valued at Rs 55.85 crore linked to a Rs 694 crore bank loan fraud case associated with Varron Aluminium, an official announced on Monday.

The ED provisionally attached these properties under Section 5 of the Prevention of Money Laundering Act (PMLA), as Varron Aluminium Private Limited and its associated entities were accused of misappropriating bank funds for personal gain, the official stated in a report.

The asset valuation stems from an assessment conducted in 2021, according to the report from State Bank of India.

The investigation initiated by the ED was based on FIRs lodged by the CBI against Varron Aluminium and others for defrauding Bank of India and State Bank of India by Rs 293.74 crore and Rs 401.25 crore, respectively.

The chargesheet alleged that a Manual Letter of Credit of Rs 300 crore was issued by Canara Bank on behalf of VAPL for its subsidiary VACPL, which was discounted by Bank of India using fraudulent documents without adequate verification.

Investigations by the ED uncovered that payments for each Letter of Credit were facilitated by opening new Letters of Credit for VAPL, VIPL, and other shell companies, a strategy employed since the inception of the very first Letter of Credit.

Credits were cyclically obtained to repay previous loans, reduce cash credit liabilities from other banks, and artificially inflate financial statements, the ED reported.

During the investigation, the ED identified Proceeds of Crime (POC) and issued two Attachment Orders, leading to the attachment of properties worth a total of Rs 179.27 crore.

According to Section 8(8) of the PMLA, attached or confiscated properties must be returned to their rightful owners or legitimate claimants, particularly victims of money laundering.

The attached assets are to be utilized for restoring ownership to those who were wrongfully deprived, as long as it is established that the properties were acquired illicitly but legally belong to innocent parties.

The ED has been actively pursuing the restitution of properties to rightful claimants and encourages affected parties, including banks and financial institutions, to utilize Section 8(8) of the PMLA for their restitution claims regarding properties confiscated by the ED.

Thanks to the ongoing efforts by the ED for the restoration of legitimate claims, SBI submitted a miscellaneous application in the Special Court under Section 8(8) of the PMLA to claim three attached properties valued at Rs 55.85 crore, based on the 2021 valuation.

In line with these efforts, during court proceedings, the ED submitted an affidavit to the Special PMLA Court in Mumbai, expressing its readiness to return the properties claimed by SBI.

On September 26, the Special Court PMLA approved SBI’s application, ordering the reinstatement of the three immovable properties valued at Rs 55.85 crore.