ED attaches Rs 55.73 crores properties of Hyd firm VMC systems
Hyderabad: The Enforcement Directorate(ED) attached properties worth around Fifty six crores belonging to M/s VMC Systems Limited under the provisions of Prevention of Money Laundering Act (PMLA), 2002 on Tuesday. The attached properties include a residential house in upscale locality jubilee hills, an agricultural land situated in Anajpur Village, Rangareddy, tea estate in Assam and others which are owned by company director V Satish Kumar and his benamis acquired through fraudulent means.
ED opened up investing into M/s VMC Systems Limited following a complaint from Punjab National Bank. The company directors defrauded the bank to a tune of Rs. 539.67 Crore. Going further into the details, in 2009, VMC Systems Ltd. approached PNB and SBI for part-financing its working capital requirements. In the time period between 2009-2012, VMC Systems Ltd. availed credit facilities from a consortium of banks consisting of Corporation Bank, Andhra Bank, SBI, PNB and Karur Vysya Bank with SBI as the Lead Bank, to the tune of Rs.1673.52 Crore (principal amount).As the M/s VMC Systems Limited failed to repay the interest or the principal amount as per the agreements. Subsequently the PNB account of VMC slipped into Non performing Asset(NPA) in 2013 followed by the remaining bank accounts. Overall the M/s VMC Systems Limited caused a loss of a whopping Rs 1745.45 Crore to a consortium of banks, said ED in a press statement.
ED took over after Money laundering angle emerged
Initially based on the complaint from Punjab National Bank, Central bureaus of investigation(CBI) started investigation and later Enforcement Directorate(ED) took over the case after the Money laundering angle emerged in the probe.
ED investigation unveiled falsification of accounts and diversion of credit facilities to multiple entities ultimately linked to VMC Systems Ltd leading to the generation of proceeds of crime. “Following its bank accounts turning into non-performing assets, VMC Systems Ltd. continued its illicit activities by transferring funds, both through its own accounts and those of its associates, to entities under the control of Mrs. Himabindu and V Satish Kumar. These entities had dummy directors who served as conduits for the movement of illicit proceeds. Upon receiving these funds, they engaged in a series of sham transactions amongst themselves, aiming to obfuscate the origin and nature of the funds”, said ED.
Following is the list of attached movable and immovable properties by ED include residential house of V Satish Kumar situated at Jubilee Hills, Hyderabad; agricultural land situated in Anajpur Village, Rangareddy acquired in the name of Rajesh Kotha, benami and associate of V Satish Kumar; a tea estate spread on 580.77 acres in Cacher district, Assam valued at 11.73 Crore in the name of Emmel Infra Properties (India) Pvt. Ltd. and receivables of VMC Systems Ltd. from BSNL to the tune of Rs. 37.03 Crore.
Further investigation revealed that V Satish Kumar and V Madhavi (Mrs. Himabindu’s sister) among others, were indicted for wire fraud, tax evasion and money laundering conspiracy by the US District Court of Western District of Washington at Seattle on the basis of a suit filed by Kyko Global Inc., USA. The Court awarded Kyko $133,000,000 due to Prithvi Information Solutions Ltd.’s fraudulent conduct and illegal racketeering activity. Subsequently, a settlement agreement was reached between Kyko Global and V Satish Kumar & V Madhavi, transferring assets in the subsidiaries of Prithvi Information Solutions Ltd. in the USA and the stake in a beneficially owned company in India namely Bastu Silpi Construction Pvt. Ltd. to Kyko Global.
