ED Attaches HDFC Mutual Fund Units Worth ₹3.31 Crore in Akshatha Minerals PMLA Case; Traces ‘Proceeds of Crime’ to Alleged Forged Mortgage Documents
Attachment Order issued under Section 5(1) of PMLA; tainted funds allegedly routed through Catholic Diocese of Bellary Trust and reinvested through successive HDFC Mutual Fund schemes
(Judicial Quest News Network)
Bengaluru, September 1,2026: The Directorate of Enforcement (ED), Bengaluru, has issued a Provisional Attachment Order under Section 5(1) of the Prevention of Money Laundering Act (PMLA), 2002, attaching 62,914.316 units of the HDFC Balanced Advantage Fund, having an approximate market value of ₹3.31 crore, in connection with the money-laundering investigation involving M/s Akshatha Minerals Pvt. Ltd., its directors and other persons.
According to the ED, the attached mutual fund units represent the identifiable trail of alleged Proceeds of Crime generated through the wrongful availing of bank credit facilities on the strength of forged and fabricated property documents. The agency stated that the provisional attachment order was passed on September 1, 2026, bringing the investment within the statutory ambit of the PMLA.
The ED investigation was initiated on the basis of an FIR registered by the Central Bureau of Investigation, Anti-Corruption Branch, Bengaluru, against M/s Akshatha Minerals Pvt. Ltd., its directors and others for alleged offences relating to cheating, criminal conspiracy and the use of forged documents.
Alleged fraudulent mortgage
The company, which was engaged in the trading and export of iron ore, had allegedly availed credit facilities amounting to approximately ₹6 crore from the Bank of India by creating an equitable mortgage over six properties.
The investigation, according to the ED, revealed that one of the properties situated at Jayamahal, Bengaluru, was falsely represented as being owned by Late Smt. Lakshmamma.
The agency alleged that forged and fabricated Khata records, tax-paid receipts, betterment charge receipts and other revenue documents were submitted to the bank in support of the mortgage transaction.
On the basis of the documents and representations allegedly placed before it, the Bank of India disbursed approximately ₹3 crore against the Jayamahal property, the ED said.
The agency’s findings indicate that the property documents were allegedly manipulated to create an appearance of valid ownership and marketable title, thereby facilitating the sanction and disbursement of the loan amount.
The alleged acts are now being examined within the framework of the scheduled offences and the corresponding laundering of the proceeds generated from them.
Money trail traced to mutual fund investment
The ED further stated that ₹1 crore, forming part of the alleged Proceeds of Crime, was transferred on February 13, 2010, from the bank account of M/s Akshatha Minerals Pvt. Ltd. to the Catholic Diocese of Bellary Trust.
The amount was subsequently invested and reinvested through various schemes of HDFC Mutual Fund, the agency stated. The investigation allegedly established that the original tainted amount remained traceable through a series of successive investments and reinvestments.
According to the ED, the money trail ultimately led to 62,914.316 units of the HDFC Balanced Advantage Fund.
The value of the units, which were initially acquired from the alleged tainted amount of ₹1 crore, has appreciated to approximately ₹3.31 crore as on the date of attachment.
The ED has treated the appreciation in the value of the mutual fund units as the fruits, accretions or equivalent value of the alleged Proceeds of Crime.
The attachment therefore covers not merely the original amount allegedly transferred, but also the subsequent increase in value arising from the investment of the tainted funds.
Prosecution complaint already filed
The ED stated that it had earlier filed a Prosecution Complaint before the Special Court, Bengaluru, on March 28, 2026, in connection with the case.
The provisional attachment is subject to adjudication under the provisions of the PMLA. The matter will now proceed in accordance with the statutory mechanism governing confirmation of attachment and further proceedings before the competent adjudicating and judicial authorities.
The ED clarified that further investigation is under progress. The allegations remain subject to adjudication before the appropriate court, and the attachment order does not by itself constitute a final determination of guilt.
