What Happened in the Rs 4,300 Crore Loan Fraud Case?
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Synopsis
The recent seizure of assets worth Rs 67.79 crore by the ED highlights a massive bank loan fraud involving Corporate Power Limited. With connections to numerous shell companies and a staggering Rs 4,300 crore loan, this case unveils a complex web of deceit and financial crime.
Key Takeaways
- The ED seized assets worth Rs 67.79 crore linked to the loan fraud.
- The total fraud amount stands at Rs 4,300 crore.
- A network of 800 shell companies was involved.
- The fraud was associated with a proposed 1080 MW coal-based power plant.
- The investigation was initiated based on a CBI FIR.
Nagpur, Oct 24 (NationPress) The ED has seized assets worth Rs 67.79 crore, including bank balances, lands, buildings, and flats, linked to a businessman and a coal-based power project company entangled in a Rs 4,300 crore bank loan fraud, according to an official statement released on Friday.
The Nagpur zonal unit of the ED executed this operation against properties located in Maharashtra, Kolkata, Delhi, and Andhra Pradesh, registered under the names of Manoj Jayaswal, his family, and others.
This action, taken on October 16, was conducted under the provisions of the PMLA, 2002, concerning the case against Corporate Power Limited and associated parties. The total value of attachments, seizures, and frozen bank assets in this investigation has now reached Rs 571 crore.
The money laundering allegations against the company and its officials are linked to a proposed 1080 MW coal-based power plant in Jharkhand, for which a loan was acquired from a consortium of 20 banks, led by the Union Bank of India.
The ED's investigation under the PMLA commenced following an FIR filed by the Central Bureau of Investigation (CBI) against Corporate Power Limited and its promoters, directors, and others for offenses including criminal conspiracy, cheating, and forgery.
The federal agency's probe uncovered that the accused established a network of 800 shell companies and 5,000 bank accounts to misappropriate the loan funds, which were declared non-performing assets (NPA) in 2013-14.
Previously, the agency conducted searches in Kolkata, Nagpur, and Visakhapatnam, recovering cash, documents, and seizing movable assets, such as mutual funds, securities, and term deposits.
The CBI noted in a statement from 2022 that the Union Bank of India, as the lead lender of the consortium, classified the account as NPA on September 30, 2013, prompting other member banks to follow suit.
Additionally, the accounts of the borrower company were deemed fraudulent on October 25, 2019, according to the CBI.
Explaining the modus operandi of the Rs 4,307.87 crore loan fraud, the CBI stated that, “Allegations indicate that from 2009 to 2013, the borrower submitted manipulated project cost statements and diverted bank funds.”
It was further claimed that trade receivables, primarily comprising transactions with related parties, were redirected to a network of various companies identified as dummy accounts, enabling the borrower to siphon off funds, as per the CBI statement.
Point of View
The recent developments in the Rs 4,300 crore loan fraud case underscore the critical need for vigilance and accountability in the financial sector. The ED's swift action reflects a commitment to tackling financial crimes, ensuring that justice prevails, and protecting public interest.
NationPress
25/10/2025
Frequently Asked Questions
What is the total amount involved in the loan fraud?
The total amount involved in the loan fraud is Rs 4,300 crore.
How much has the ED seized so far?
The ED has seized assets worth Rs 67.79 crore in this case.
Which company is at the center of this fraud?
The company at the center of this fraud is Corporate Power Limited.
What actions have been taken against the accused?
The ED has attached properties and conducted investigations leading to the seizure of assets linked to the accused.
When was the FIR against Corporate Power Limited registered?
The FIR against Corporate Power Limited was registered by the CBI in 2022.
