Hyderabad, March 6 – The Directorate of Enforcement (ED), Hyderabad Zonal Office, has provisionally attached immovable properties worth Rs 26.86 crore in a bank fraud case involving Sowbhagya Ispat India Pvt. Ltd. (SIIPL).
The properties, attached under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, include residential flats, a residential house, and open plots of land.
In a statement on Friday, the ED said that it had initiated an investigation based on the FIR registered by the CBI, BS&FB, Bangalore, under Sections 120-B, 420, 468 and 471 of the Indian Penal Code and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988, against Sowbhagya Ispat India Pvt. Ltd., its directors, and others for defrauding Andhra Bank (now Union Bank of India) and causing wrongful loss to the bank.
The ED investigation revealed that SIIPL had availed term loans and working capital facilities from the then Andhra Bank to establish and expand a steel manufacturing unit.
However, the accused fraudulently obtained enhanced credit facilities by submitting fabricated stock statements, inflated financials, forged documents, and false certificates.
Further investigation revealed that the loan funds were diverted and siphoned off instead of being used for the intended purposes. The funds were routed through related entities and accommodation entry providers, creating fictitious turnover and circular transactions to inflate the company's financial position.
The investigation by the central agency also revealed that the accused submitted false and inflated stock statements, manipulated receivables, and engaged in fictitious transactions in order to artificially maintain their creditworthiness and obtain higher credit limits from the bank.
By employing these fraudulent means, the accused obtained and utilized bank loans, thereby causing wrongful loss to the bank and generating proceeds of crime amounting to Rs 46.52 crore.
The bank has subsequently recovered Rs 15.52 crore, and out of the remaining proceeds of crime of Rs 31 crore to be recovered, properties worth Rs 26.86 crore have been identified during the PMLA investigation, and these have been attached under the provisions of the PMLA, the ED said.