New Delhi: The Enforcement Directorate (ED) said Wednesday here that it has arrested two persons in Hyderabad in connection with a money laundering probe case linked to an alleged over Rs 1,700 crore bank loan fraud case.
GSC Raju, promoter of Leo Meridian Infrastructure Projects and Hotels Ltd (LMIPHL), and his close associate AV Prasad were arrested under the Prevention of Money Laundering Act (PMLA) and have now been remanded to ED custody, the agency said in a statement.
The case pertains to the accused fraudulently availing loans, in connivance with others, from a consortium of banks and subsequent default of loans to the tune of Rs 1,768 crore, it said.
“Investigation so far has unearthed 33 shell companies and more than forty contractors in this case,” the ED said.
The ED filed the criminal case under PMLA after studying three FIRs of the CBI against the accused.
The agency said that a ‘well-planned conspiracy’ was executed by Raju along with his associates to defraud the banks by creating an illegal layout and selling plots to 315 persons.
“Raju further mortgaged parts of the already sold land to the banks to obtain loan for a resort project. Even approach roads were also fraudulently mortgaged to the banks and revenue records were manipulated to cheat banks and plot owners,” the ED informed.
“Subsequently, loans sanctioned by the banks were siphoned off using shell firms opened in the names of petty employees of LMIPHL,” the agency alleged.
Part of the ‘diverted funds’ were remitted back into LMIPHL as investments using Kolkata-based ‘jama-kharch’ (shell) companies.
“Investigation also revealed creation of bogus share capital and share premium book entries in balance sheets of LMIPHL by Raju with complicity of certain Chartered Accountants and they used this bogus equity to fraudulently show margin money and to improve the debt-equity ratio of the firm to cheat banks,” the ED said describing the modus operandi of the alleged fraud.
Assets worth over RS 250 crore have been attached by the agency in this case.