Loan fraud: ED attaches Rs. 1,122cr-worth Diamond Power Infra assets
The Enforcement Directorate (ED) on Tuesday said it has attached assets worth Rs. 1,122 crore, including windmills and an under-construction hotel, of Vadodara-based Diamond Power Infrastructure Limited (DPIL) in connection with its money laundering probe in a bank fraud case. Gujarat's Diamond Power Infra is accused of cheating various banks to the tune of Rs. 2,654 crore. Here's more on it.
The agency had filed a criminal case against the firm and its promoters under the Prevention of Money Laundering Act, after taking cognizance of a CBI FIR, and had searched its premises last month. The assets of DPIL and its related companies such as Diamond Power Transformer Ltd, Diamond Projects Ltd, Mayfair Leisures, and Northway Spaces have been attached as part of the order.
"The properties include plant, machinery, building and land of in Vadodara, three windmills in Bhuj, residential bungalows/flats of the Bhatnagar (promoters) family, unsold flats, under-construction hotel, and other land parcels held by related companies of DPIL, all located in Vadodara," the Enforcement Directorate (ED) said.
The agency said the company, DPIL, through its related entities, was able to gain funds "fraudulently" to the tune of Rs. 261 crore by twisting and manipulating the facility of Letter of Credit (LC) from the banks. "It also diverted a huge amount of funds received as loan/cash credit to its real estate companies such as Northway Spaces and Mayfair Leisures," it said.
The promoters, the agency said, through a web of companies and cross holdings were found to be the "main decision makers" and controllers and thus the beneficial owners of the company and all the related companies.
"It appears there was little genuine business activity done by the Diamond group of companies and most of the business shown on records was from such fictitious transactions, and this has resulted into default of Rs. 2654.40 crore to banks," ED said. The ED is probing if the alleged defaulted loans were laundered to create illegal assets and black money by the accused.
The CBI had said DPIL, which manufactures electric cables and equipment, is promoted by SN Bhatnagar and his sons Amit Bhatnagar and Sumit Bhatnagar, who were also the executives of the firm.
It is alleged that the DPIL, through its management, had fraudulently availed credit facilities from a consortium of 11 banks (both public and private) since 2008, leaving behind an outstanding debt of Rs. 2,654.40 crore as on June 29, 2016, the CBI said. The loan amount of Rs. 2,654 crore was declared a non-performing asset in 2016-17, it said.
Among the credit facilities from banks, the Bank of India's exposure to the company is Rs. 670.51 crore, Bank of Baroda's Rs. 348.99 crore, and that of ICICI Bank Rs. 279.46 crore, the CBI FIR said.
