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Rs 4,300 Crore Loan Fraud: ED Seizes Rs 67 Crore in Power Company Assets

The Enforcement Directorate has seized assets worth nearly Rs 68 crore in connection with a massive Rs 4,300 crore bank loan fraud. This latest action targets properties linked to businessman Manoj Jayaswal and Corporate Power Limited across multiple states. Investigators uncovered an elaborate network of 800 shell companies used to divert funds meant for a Jharkhand power project. The case originated from a CBI FIR that exposed manipulated financial statements and systematic fund siphoning between 2009 and 2013.

Key Points: ED Attaches Rs 67 Crore Assets in Corporate Power Loan Fraud Case

  • ED attached properties worth Rs 67.79 crore across four states in latest action
  • Total attachments in the case now reach Rs 571 crore following multiple seizures
  • Fraud involved 800 shell companies and 5,000 bank accounts to divert funds
  • Loan was taken from 20-bank consortium led by Union Bank of India for power project
  • CBI investigation revealed manipulated project costs and fund diversion to dummy companies
2 min read

Rs 4,300 crore loan fraud: ED seizes Rs 67 crore assets of power company, officials

ED seizes Rs 67.79 crore assets in Rs 4,300 crore bank fraud involving Corporate Power Limited, shell companies, and diverted loan funds for Jharkhand power project.

"It was further alleged that between the years 2009 to 2013, the said borrower had submitted manipulated project cost statements and also diverted the bank funds. - CBI"

Nagpur, Oct 24

The ED attached movable and immovable properties worth Rs 67.79 crore in the form of bank balances, lands, buildings and flats linked to a businessman and a coal-based power project company involved in a Rs 4,300 crore bank loan fraud, said an official on Friday.

The Nagpur zonal unit of the ED took action against properties situated across Maharashtra, Kolkata, Delhi and Andhra Pradesh in the name of Manoj Jayaswal, his family members and others.

The operation on October 16 was conducted under the provisions of PMLA, 2002, in the case against Corporate Power Limited and others. The total attachments/seizure/frozen bank assets in this case now stand at Rs 571 crore.

The money laundering case against the company and its officials is linked to a proposed coal-based power plant in Jharkhand of 1080 MW power for which a loan was taken from a consortium of 20 banks led by the Union Bank of India.

The ED initiated its PMLA investigation based on an FIR registered by the Central Bureau of Investigation (CBI) against Corporate Power Limited, its promoters, directors, and others for criminal conspiracy, cheating, and forgery.

The federal agency probe revealed that the accused created a network of 800 shell companies and 5,000 bank accounts to misappropriate the loan funds that were declared non-performing assets (NPA) in 2013-14.

Earlier, the agency had conducted searches in Kolkata, Nagpur and Visakhapatnam in the case and recovered cash, documents, and seized movable assets like mutual funds, securities and term deposits.

The CBI, after registering an FIR, said in a statement in 2022 that the Union Bank of India, the lead lender of the consortium, declared the account as non-performing assets (NPA) on September 30, 2013, and subsequently, the other member consortium banks also classified the said account as NPA.

The accounts of the said borrower company were declared as fraudulent on October 25, 2019, the CBI said in a statement.

Shedding light on the modus operandi used in the Rs 4,307.87 crore loan fraud, the CBI said, "It was further alleged that between the years 2009 to 2013, the said borrower had submitted manipulated project cost statements and also diverted the bank funds."

It was also alleged that the trade receivables, mainly including transactions to related parties and funds, were diverted to a web of various companies that were dummy accounts; accordingly, the borrower was able to siphon off the funds, the CBI statement said.

- IANS

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Reader Comments

P
Priya S
This is so disheartening. While common people struggle to get small loans, these big shots are looting thousands of crores. The loan was taken in 2009 and declared NPA in 2013, but action is happening only now? Why so much delay in our system? 🤔
S
Sarah B
As someone working in banking sector, I can tell you this is just the tip of the iceberg. The sophistication of creating 800 shell companies shows how deeply entrenched these frauds are. Kudos to ED and CBI for unraveling this complex web. More such actions needed!
A
Arjun K
Rs 4300 crore could have built so many schools, hospitals, and infrastructure projects! Instead, it went to these fraudsters. This money belongs to the people of India and should be recovered completely. Hope the courts ensure strict punishment.
M
Michael C
While I appreciate the enforcement action, I'm concerned about the due diligence by the 20 banks in the consortium. How did they approve such a massive loan without proper verification? The banking system needs stronger internal controls to prevent such frauds.
K
Kavya N
This is exactly why common people hesitate to trust big corporations. The scale of this fraud is mind-boggling! Hope this sends a strong message to other potential fraudsters. Our enforcement agencies are becoming more effective. 🙏

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