New Delhi, April 24: The Enforcement Directorate (ED) on Tuesday attached property worth Rs 1,122 crore belonging to Vadodara-based DPIL firm in connection with a Rs 2,654.40 crore bank fraud case.
ED has attached properties of DPIL and its related companies Diamond Power Transformer Ltd (DPTL), Diamond Projects Ltd, Mayfair Leisures and Northway Spaces.
“The attached properties include plants, machinery, buildings and land of DPIL and DPTL in Vadodara, three windmills in Bhuj. Some unsold flats of Northway Spaces, an under construction Hotel of Mayfair Leisures and other land parcels held by related companies of DPIL, all located in Vadodara, were also attached,” an ED official said.
The ED has also attached some residential bungalows and flats of promoter-directors of the Diamond Power Infrastructure Pvt. Ltd. — Suresh Narain Bhatnagar, his two sons Amit Suresh Bhatnagar and Sumit Suresh Bhatnagar under Prevention of Money Laundering Act (PMLA).
The DPIL, which deals in cables and other electrical equipment, is alleged to have availed credit facilities fraudulantly since 2008, leaving behind a total outstanding debt of Rs 2,654.40 crore as of June 29, 2016 sanctioned by a consortium of banks and private organisation.
The Central Bureau of Investigation (CBI), which is also probing corruption charges in the case, had on April 18 arrested the three from Rajasthan’s Udaipur, 23 days after it filed an FIR against them.
The ED is probing financial irregularities under money laundering case it has filed, based on the CBI FIR.
ED investigation so far revealed that DPIL had indulged into circuitous transactions of huge amounts with various parties including its related parties by issuing fake invoices without any actual sale or purchase of goods.
“This was done with dual intention of availing CENVAT credit fraudulently as well as projecting increased turnover before the banks in their financial records. DPIL has shown fake entries of receivables in their books of accounts of around Rs 1,000 crores from their debtors and on the basis of such books of account DPIL is continuing to get credit from the banks.
“Most of these figures are exaggerated,” the ED said.
It said that the DPIL through its related party was able to gain funds fraudulently worth Rs 261 crore by twisting and manipulating the facility of Letter of Credit from the banks.
“DPIL also diverted huge amount of funds received as loan to its real estate companies such as Northway Spaces and Mayfair Leisures.”
The ED said that Bhatnagar family, through its web of companies and cross holdings, were found to be the main decision makers, controllers and thus the beneficial owners of DPIL and all the related companies.
“Therefore, 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 2,654.40 crore to banks.”
The CBI had on March 26, filed a case against DPIL and its directors for defrauding the consortium of 11 banks. The loan availed by them was declared a non-performing asset in 2016-17.
The company managed to get term loans and credit facilities though it figured in the Reserve Bank of India’s list of defaulters and the caution list of Export Credit Guarantee Corp of India at the time of initial sanction of credit limits by the consortium.
Bank of India, which tops the list with Rs 670.51 crore of loans, is followed by Bank of Baroda (Rs 348.99 crore), ICICI Bank (Rs 279.46 crore), State Bank of India (Rs 266.37 crore), Axis Bank (Rs 255.32 crore), Allahabad Bank (Rs 227.96), Dena Bank (Rs 177.19 crore), Corporation Bank (109.12 crore), Exim Bank of India (Rs 81.92 crore), IOB (Rs 71.59 crore) and IFCI (58.53 crore).
The CBI FIR said DPIL, through its founder and directors associated in the criminal conspiracy with unidentified bank officials of various banks, cheated those banks by way of misappropriating public funds through falsification of accounts, creation of false documents, forgery of records and knowingly used such records as genuine.