ED Uncovers Massive Bank Fraud: Assets Worth Crores Seized

The Enforcement Directorate seized 86 land parcels worth Rs 31.94 crore from Shri Lakshmi Cotsyn Limited under the Prevention of Money Laundering Act. The investigation revealed the company violated financial agreements, leading to a significant bank fraud case involving assets liquidated to recover debts.

The Directorate of Enforcement's Lucknow Office has provisionally seized 86 land parcels belonging to Shri Lakshmi Cotsyn Limited, valued at Rs 31.94 crore. This move is part of investigations into a bank fraud case under the Prevention of Money Laundering Act.

According to the ED, these properties, mostly agricultural land in Chhattisgarh, were registered under the company's name or with trusted staff and unsuspecting individuals' names. The ED inquiry was sparked by a 2021 complaint from a Central Bank of India official, pointing to extensive fraud by the company.

The investigation disclosed that Shri Lakshmi Cotsyn Ltd misappropriated public funds by falsifying accounts and engaging in criminal activities between 2010 and 2018. The company misled a bank consortium led by the Central Bank of India, failing to adhere to financial discipline resulting in accounts being classified as non-performing assets.

Audits revealed inflated inventories and improper sales practices, including unrecorded discounts of Rs 207.29 crore. Funds were reportedly misdirected into personal accounts and invested in properties under employee names.

The case also exposed Rs 7377 crore in loans declared fraudulent by the Reserve Bank of India, with assets liquidated by a Resolution Professional as per NCLT directions to recover debts.

(With inputs from agencies.)