ED Attaches Assets Worth Rs. 48.71 Crore in Multi-Crore Bank Fraud Case Involving Transstroy India Ltd.
(Judicial Quest News Network)
The Directorate of Enforcement (ED), Hyderabad Zonal Office, has provisionally attached immovable properties valued at Rs. 48.71 crore in connection with a major bank fraud case involving M/s Transstroy India Ltd. (TIL) and its associated entities. The action was taken under the Prevention of Money Laundering Act (PMLA), 2002.
The investigation was triggered following an FIR lodged by the Anti-Corruption Bureau (ACB) and the Central Bureau of Investigation (CBI), Hyderabad, under various provisions of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988. The case revolves around TIL, which had availed loans and credit facilities from a consortium of banks but misused the funds for purposes other than those originally intended. As a result, these loan accounts became Non-Performing Assets (NPA) due to the company’s persistent irregularities, including the devolvement of Letters of Credit (LCs), non-payment of interest on working capital, and failure to route transactions through consortium banks.
Further investigation by the ED revealed that TIL, along with its directors and promoters, misrepresented their financial activities by inflating their turnover through fictitious sales and purchases involving shell entities they controlled. These fraudulent transactions facilitated the diversion of bank funds, including the creation of accommodated LCs that led to their devolvement. This illicit activity resulted in a financial loss of Rs. 5115 crore, including interest, to the consortium of banks.
The investigation also uncovered that the promoters of TIL established several shell companies, appointing dummy directors to conceal the movement and layering of the proceeds of crime. Additionally, invoices for transporting steel in large quantities were manipulated to include vehicles, such as LMVs and two-wheelers, that had no role in the transportation process.
The ED also found that approximately Rs. 85.90 crore was withdrawn in cash from the bank accounts of TIL and its associated entities, which were used by the promoters and directors for personal enrichment. Moreover, the investigation revealed that immovable properties, acquired through the proceeds of crime, were transferred to family members with the intent to shield them from potential law enforcement actions.
The attached properties include land parcels that were transferred by one of TIL’s directors to his family members, along with residential premises linked to a key individual involved in the fraudulent activities.
The investigation is ongoing, with further developments expected.
