ED attaches ₹26.8 crore assets in Sowbhagya Ispat bank fraud case
HYDERABAD: The Directorate of Enforcement (ED), Hyderabad Zonal Office, has provisionally attached immovable properties worth ₹26.8 crore in connection with a bank fraud case involving M/s Sowbhagya Ispat India Pvt. Ltd. (SIIPL).
The attachment was made under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The properties include residential flats, a residential house and open plots of land linked to the accused.
CBI FIR triggered PMLA probe
The ED initiated its investigation based on a First Information Report registered by the Central Bureau of Investigation (CBI), Banking Securities and Fraud Branch, Bengaluru.
The FIR was filed under Sections 120-B, 420, 468 and 471 of the Indian Penal Code and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988. The case was registered against SIIPL, its directors and others for allegedly defrauding Andhra Bank, now Union Bank of India, and causing wrongful loss to the bank.
Forged documents used to secure higher credit
According to the ED, SIIPL had availed term loans and working capital facilities from Andhra Bank to establish and expand a steel manufacturing unit.
However, investigators found that the accused secured enhanced credit facilities by submitting fabricated stock statements, inflated financial statements, forged documents and false certificates.
The ED said the accused also diverted and siphoned off loan funds instead of using them for the sanctioned purpose. Funds were allegedly routed through related entities and accommodation entry providers to create fictitious turnover and circular transactions to inflate the company’s financial position.
Bank suffered loss of ₹46.5 crore
The investigation further revealed that the accused submitted false and inflated stock statements and manipulated receivables to maintain higher drawing power and obtain larger credit limits.
Through these fraudulent activities, the accused allegedly caused wrongful loss to the bank and generated proceeds of crime amounting to ₹46.5 crore.
The bank has recovered ₹15.5 crore so far. Of the remaining proceeds of crime worth ₹31 crore, the ED has identified and attached assets valued at ₹26.8 crore during the PMLA investigation.
The agency said further investigation in the case is under progress.
