ED Restores Assets Worth ₹52.35 Crore in Shakti Bhog Foods Ltd Case; Market Value Exceeds ₹120 Crore
(Judicial Quest News Network)
New Delhi 11-06-2025-The Directorate of Enforcement (ED) has restored assets valued at ₹52.35 crore (with an estimated market value exceeding ₹120 crore), comprising both immovable and movable properties. These assets were earlier provisionally attached under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 during the course of investigation against M/s Shakti Bhog Foods Limited (SBFL).
The investigation was initiated by ED based on an FIR lodged by the State Bank of India (SBI) on behalf of a consortium of 10 member banks. The FIR was filed against M/s Shakti Bhog Foods Limited, its directors, unknown public servants, and other unidentified individuals for alleged offences under various sections of the Indian Penal Code (IPC), 1860 and the Prevention of Corruption Act, 1988.
The probe revealed that M/s SBFL had availed substantial credit facilities from the consortium banks, with SBI acting as the lead bank. The company’s loan account was declared a Non-Performing Asset (NPA) on 31.03.2015, with total outstanding dues amounting to ₹3,269.42 crore.
Shakti Bhog Foods Limited, engaged in the business of manufacturing wheat flour, pulses, rice, etc., allegedly diverted the sanctioned credit facilities to various dummy entities and sister concerns without any genuine business activity, thereby committing large-scale financial fraud.
The ED continues its efforts to trace and recover assets linked to the alleged laundering and ensure justice in accordance with the law.
Fraudulent transactions involving dummy entities were orchestrated using counterfeit bills and transport documents to falsely portray them as legitimate business dealings. In executing this scheme, multiple shell entities were deployed to misappropriate, circulate, and siphon loan funds obtained by SBFL. The investigation has identified approximately 108 such dummy entities, which were managed and controlled by entry operators who charged commissions for facilitating fictitious transactions.
Funds were rotated through these entities and shell companies, with loan amounts being siphoned off in various forms, including cash withdrawals, commission payments, and trade discounts. Additionally, portions of SBFL’s loan funds were transferred to these dummy entities before being redirected to the bank accounts of SBFL, its directors, promoters, and various third parties, all without any genuine business transactions. This deliberate and calculated misappropriation of borrowed funds was aimed at acquiring properties and other assets while falsely projecting the proceeds of crime (PoC) as untainted.
During the investigation, the Enforcement Directorate (ED) issued five Provisional Attachment Orders, securing assets valued at ₹131.93 crore belonging to several accused individuals. It also filed six Prosecution Complaints before the Hon’ble Special Court under the Prevention of Money Laundering Act (PMLA). The Liquidator, appointed by the Hon’ble NCLT on behalf of the Committee of Creditors (CoC), including consortium lender banks, submitted an application before the Hon’ble Special Court (PMLA) requesting the restoration of certain attached movable and immovable properties.
Aligning with the intent of PMLA, 2002, to return the proceeds of crime to legitimate claimants and victims of money laundering, the ED consented to the restoration of certain attached properties under Section 8(8) of PMLA, 2002. Acting on the ED’s submission, the Hon’ble Special Judge (PMLA), through an order dated 04.06.2025, directed the restoration of immovable and movable properties worth ₹52.35 crore (with an estimated market value exceeding ₹120 crore) to the liquidator representing CoC. The restoration of assets to rightful claimants and victims signifies a crucial milestone in the ED’s ongoing mission to ensure that the proceeds of crime are rightfully returned. The ED remains steadfast in its commitment to combat financial crimes and deliver justice to affected individuals.
