ED Attach 86 Land Parcels Worth Rs. 31.94 Crore in Shri Lakshmi Cotsyn Bank Fraud Case
(Judicial Quest News Network)
The Directorate of Enforcement (ED) has provisionally attached 86 land parcels, totalling 73.34 hectares valued at Rs. 31.94 crore, in connection with the ongoing bank fraud investigation into M/s Shri Lakshmi Cotsyn Limited. The properties, located in Bhatapara and Baloda Bazar, Chhattisgarh, include agricultural land registered under the names of the company, its trusted employees, and other individuals, and were seized under the Prevention of Money Laundering Act (PMLA), 2002.
The ED’s action follows a case registered by the CBI’s Anti-Corruption Branch in New Delhi, based on a complaint filed by Shri Rajeev Khurana, DGM at Central Bank of India. The complaint alleges that the company, along with its top management, engaged in a series of fraudulent activities, including misappropriation of funds, criminal breach of trust, conspiracy, and falsification of financial records from 2010 to 2018.
The investigation reveals that M/s Shri Lakshmi Cotsyn Ltd. misused financial assistance obtained from a consortium of 23 banks, led by Central Bank of India, to finance manufacturing operations. The forensic audit exposed multiple irregularities, such as inflated inventory records, significant sales to undisclosed and related parties, and unsubstantiated discounts amounting to Rs. 207.29 crore. Additionally, advances to suppliers were written off without documentation, indicating a clear diversion of funds.
Despite the liquidation of M/s Shri Lakshmi Cotsyn Ltd. by the National Company Law Tribunal (NCLT), which resulted in the sale of assets worth approximately Rs. 265.44 crore, further investigation has uncovered that funds were diverted to the group’s other company, M/s Shri Lakshmi Power Ltd., and subsequently transferred to individuals. These funds were used to acquire land in Chhattisgarh, registered under the names of the company’s trusted employees and local tribal people.
The total outstanding loan amount in the case stands at Rs. 7,377 crore, which has already been declared a fraud by the Reserve Bank of India (RBI). All assets of M/s Shri Lakshmi Cotsyn Ltd. have been liquidated under the supervision of the Resolution Professional appointed by the NCLT.
The ED’s investigation is ongoing, with further actions expected
