The Enforcement Directorate (ED) has attached assets valued at Rs 255.17 crore of a city-based cooperative credit firm in an alleged money laundering and cheating case, an official said on Friday.
“Assets of Rs 255.17 crore of Sree Kanva Souhardha Cooperative Credit Ltd (SKSCCL) and other entities have been attached under the Prevention of Money Laundering Act (PMLA), 2002 in a case related to cheating of investors,” the ED official said in a statement here.
The assets, in the form of moveable and immovable properties in Karnataka, are in the name of N Nanjundaiah, his family members, Kanva Group of Companies, including the credit firm. Agricultural and non-agricultural land, buildings, resorts, and bank balances are part of the attached properties.
Investigation under the PMLA was initiated on a complaint from the Registrar of Cooperative Societies in the city and the FIRs filed at Basaveshwara police station in the city’s northwest suburb against the accused.
According to the FIRs, the cooperative credit firm and others have been charged under Section 420 of the Indian Penal Code for collecting Rs 650 crore in deposits from the members of the public, assuring them of a high interest rate per annum.
“The accused advanced loans out of deposits, working capital, shares reserves etc, without security and against statutory rules and regulations,” asserted the official.
The ED also recently raided the premises of Nanjundaiah and other directors of the credit firm and seized incriminating documents.
“Nanjundaiah was arrested on August 25 under the PMLA and a local court sent him to judicial custody after his interrogation in ED custody for 7 days in the cheating case,” the official pointed out.
Investigation revealed that Nanjundaiah, his Kanva credit firm and his group companies allegedly mobilised Rs 650 crore through unauthorised agents from 13,000 investors, luring them by offering 12-15 per cent interest.
“The accused manipulated the credit firm’s accounts and suppressed its financial position. Though it was in loss, they projected profit and gave loans, making recovery difficult,” said the official.
“The credit firm also spent huge amounts illegally on collection agents. It had very low liquidity in its bank accounts. The accused made dubious entries in Cloud-based Zenit software of the firm and submitted a fudged report,” said the official.
Of the collected deposits, about Rs 400 crore was swindled, diverted and advanced as loans without surety to Kanva Group firms of Nanjundaiah, who also availed Rs 120 crore in loans from banks but failed to repay.
“Further investigation revealed that the collected money was embezzled and transferred to various accounts of Kanva group, Nanjundaiah and his family members,” the official added.