The attachment is in connection with a bank fraud case of Rs 895.45 crore involving Cethar Ltd.
The ED initiated proceedings under the Prevention of Money Laundering Act (PMLA) based on an FIR registered by the CBI against Cethar Ltd, a boiler manufacturing company based in Trichy, Tamil Nadu.
According to the ED, Cethar Ltd. availed credit facilities amounting to Rs 895.45 crore from a consortium of lenders led by the Indian Bank, SAM branch, Madurai.
The company’s accounts turned non-performing assets (NPAs) on December 31, 2012, and proceedings under the Insolvency and Bankruptcy Code (IBC) were subsequently initiated before the National Company Law Tribunal (NCLT) in Chennai in 2017.
“Investigations under PMLA were initiated in 2019, and searches were conducted at the premises of the company’s director. Immovable property and jewellery worth Rs 9.08 crore were attached in 2022, which were later confirmed by the Adjudicating Authority, PMLA,” the ED said.
During the investigation, it was revealed that Rs 565 crore had been kept off the books, in addition to Rs 228 crore being written off as a loss on the sale of investments.
The ED said, “In order to be awarded the Engineering, Procurement and Construction contract of SKS Power Generation (Chhattisgarh) Limited (SKSPGCL) worth about Rs 3,500 crore, Cethar Ltd. siphoned off Rs 228 crore to SKS Ispat & Power Ltd under the guise of an investment in shares of the then parent company SKS Ispat & Power Ltd. However, the interest accruing at a rate of 12 per cent per annum compounded was kept off the books.”
“This money was accounted for as trade receivables until 2016-17 when it was written off as a loss on the sale of investments through the creation of backdated/forged agreements,” the ED added.
The ED official also revealed that these actions took place just two days prior to the commencement of NCLT proceedings, indicating a high level of criminal conspiracy.
As a result, K. Subburaj, Director of Cethar Ltd, colluded with Anil Gupta, CMD of SKS Ispat & Power Ltd, with the intention of siphoning off assets worth Rs 793 crore from the books of Cethar, which ultimately led to its insolvency and liquidation under the IBC, 2016.
A complex scheme of agreements and transactions was created to conceal the proceeds of the crime amounting to Rs 793 crore, which were safely parked at SKS Ispat & Power Ltd.
SKS Ispat & Power Ltd. used these proceeds for its regular business purposes. Therefore, fixed business assets of SKS Ispat & Power Ltd, including land, buildings, plants, machinery, roads and railway siding, with a total value of Rs 517.81 crore according to their books, have been attached under the provisions of the PMLA.
–Ajit Weekly News
atk/khz/
News Credits – I A N S
