ED raids 10 premises in Delhi, UP, Punjab in ₹450 crore loan fraud case
Synopsis
The ED has raided 10 premises across three states in a ₹450 crore bank loan fraud case against Santosh Overseas Ltd, uncovering a layered network of shell companies, fake invoices, and round-tripped funds. With ₹75 crore in assets traced to promoter family members and a statutory auditor in the crosshairs, the investigation points to a systemic fraud that went well beyond the company itself.
Key Takeaways
The Enforcement Directorate (ED) searched 10 premises across Delhi , Uttar Pradesh , and Punjab on 25 July .
The case involves alleged bank loan diversion of nearly ₹450 crore by M/s Santosh Overseas Ltd (SOL) .
Searches were conducted under Section 17 of PMLA, 2002 by the ED's Lucknow Zonal Office .
Cash of ₹10.5 lakh seized; asset records worth nearly ₹75 crore recovered from family members' names.
Funds were allegedly routed through shell entities, fake invoices, and circular transactions with no real business activity.
Further investigation is ongoing; the ED is tracing the full fund trail and the roles of all linked individuals and entities.
The Enforcement Directorate (ED) conducted search operations at ten premises across Delhi, Uttar Pradesh, and Punjab on 25 July in connection with an alleged bank loan diversion and money-laundering case involving M/s Santosh Overseas Ltd (SOL). The searches, carried out by the ED's Lucknow Zonal Office, targeted premises linked to the company's promoters, associated firms, family members, and other related entities. According to officials, the alleged fraud resulted in a wrongful loss of nearly ₹450 crore to a consortium of lender banks.
Background and Legal Basis
The ED's action was initiated under Section 17 of the Prevention of Money Laundering Act (PMLA), 2002, following an FIR registered by the Central Bureau of Investigation (CBI) on the basis of a complaint filed by IDBI Bank on behalf of the consortium. Investigators allege that SOL's promoters fraudulently diverted and siphoned off bank loans that had been legitimately sanctioned to the company.
How the Alleged Fraud Was Structured
The ED's probe has revealed that the proceeds of crime were laundered through a complex web of shell entities, accommodation entry operators, and related concerns. Funds were reportedly moved using bogus purchase and sale transactions, fake invoices, and circular movement of money with no genuine underlying business activity.
Investigators found that several shell entities were created solely to route funds and generate accommodation entries, and were set up using forged or misused identity documents. The agency also detected round-tripping of funds through multiple entities controlled by the promoters and their family members — pointing, according to the ED, to systematic layering and integration of illicit proceeds.
What Was Seized
During the operations, cash amounting to ₹10.5 lakh was seized. Officials also recovered records relating to assets valued at nearly ₹75 crore standing in the names of family members and their associated entities. In addition, investigators seized incriminating documents, digital devices, and financial records pertaining to the alleged diversion, layering, and siphoning of funds. The statutory auditor connected with the alleged laundering activities was also among those whose premises were searched.
Investigation Status
The ED has confirmed that further investigation is ongoing. The agency is currently examining the trail of funds and the role of various entities and individuals in the alleged money-laundering scheme linked to the bank loan fraud. This case is part of a broader pattern of ED action against loan diversion networks, where shell companies and accommodation entry operators have repeatedly been found at the centre of large-scale bank fraud.
Point of View
A shell-company maze, forged identity documents, and a statutory auditor whose premises end up in a search list. What stands out here is the inclusion of the auditor — a signal that the ED is examining whether professional gatekeepers enabled the fraud rather than flagged it. With ₹75 crore in assets traced to family members, the promoter circle appears wide. The real question is whether asset attachment and prosecution follow at the pace the scale of alleged fraud demands, or whether this remains another search-and-seize headline without a conviction.
NationPress
26 Jul 2026
Frequently Asked Questions
What is the Santosh Overseas Ltd bank loan fraud case?
It is an alleged bank loan diversion and money-laundering case in which M/s Santosh Overseas Ltd (SOL) is accused of fraudulently diverting and siphoning off bank loans, causing a wrongful loss of nearly ₹450 crore to a consortium of lender banks including IDBI Bank. The CBI had registered an FIR in the case, which prompted the ED to launch a PMLA investigation.
Where did the ED conduct its searches and under what law?
The ED's Lucknow Zonal Office searched 10 premises across Delhi, Uttar Pradesh, and Punjab on 25 July under Section 17 of the Prevention of Money Laundering Act (PMLA), 2002. The premises included those of promoters, family members, associated companies, accommodation entry operators, and the statutory auditor.
What was seized during the ED raids?
Investigators seized cash of ₹10.5 lakh and recovered records relating to assets valued at nearly ₹75 crore standing in the names of family members and their entities. Digital devices, financial records, and other incriminating documents were also seized.
How was the alleged money laundering carried out?
According to the ED, the promoters of SOL used a network of shell entities, fake invoices, bogus purchase and sale transactions, and circular movement of funds to launder the proceeds of crime. Several shell entities were created solely for routing funds, using forged or misused identity documents.
What happens next in the investigation?
The ED has confirmed that the investigation is ongoing. The agency is examining the complete trail of funds and the roles of all entities and individuals linked to the alleged fraud, which may lead to asset attachments and further legal action under PMLA.
