ED Conducts Raids on Pratibha Industries in Connection with Rs 4,957 Crore Loan Fraud Investigation
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Mumbai, Jan 4 (NationPress) The Directorate of Enforcement (ED), Mumbai Zonal Office, carried out extensive searches on January 2 at 14 locations in Mumbai and Delhi as part of a Rs 4,957 crore loan fraud investigation linked to M/s Pratibha Industries Limited and its associates, as stated by the ED on Saturday.
The searches were executed under the guidelines of the Prevention of Money Laundering Act (PMLA), 2002.
In a formal announcement, the ED indicated that this operation led to the freezing of bank accounts and mutual funds totaling Rs 5.4 crore, in addition to the retrieval of crucial evidence connected to the acquisition of real estate.
This case stemmed from an FIR lodged by the Central Bureau of Investigation (CBI), following a complaint from Bank of Baroda. The complaint accused M/s Pratibha Industries Limited, along with its director Ajit Kulkarni and others, of orchestrating a significant bank fraud, misleading a consortium of lenders for a total of Rs 4,957 crore.
The ED reported that the promoters and directors of M/s Pratibha Industries Limited engaged in a criminal conspiracy to embezzle loan funds, leading to considerable financial detriment for the banks while allowing them to secure unjust benefits. “They reportedly executed this by manipulating loan funds through illicit transactions and circular trading tactics,” the statement revealed.
The ED's investigation also revealed that the promoters employed accommodation entry providers to obscure and layer the funds. This involved a network of fake entities and dubious third-party transactions, which were subsequently used to purchase immovable assets.
The ED has confirmed that the investigation is ongoing, with the goal of uncovering the complete scope of the money laundering activities, including identifying all beneficiaries and tracing the misappropriated funds.
The accounts of Pratibha Industries were designated as NPA on December 31, 2017. Following this, the accounts were also classified as fraud by the consortium banks' members.
