The Enforcement Directorate (ED) has provisionally attached movable and immovable property worth Rs. 73.26 crore of M/s REI Agro Ltd and the beneficiary owners, in connection with a bank fraud case, initiated based on the FIR registered by Central Bureau of Investigation on October 26, 2015, for de-frauding Consortium of Banks to the tune of Rs. 3871.71 crores.
A Prevention of Money Laundering Act (PMLA) investigation revealed that M/s REI Agro Ltd. and its directors, Sandip Jhunjhunwala (beneficiary owner) and others, have diverted funds sanctioned as working capital loan by 14 banks under consortium led by UCO Bank by raising bogus/fake bills, investing in M/s Varrsana Ispat Pvt. Ltd. directly and through controlled companies, settling of higher amount of Capex advances given to various shell companies by way of arbitration at a very low amount, showing higher cost of construction and arranging fake purchase/sale bills etc.
The investigation further revealed that M/s REI Agro Ltd. and its directors, Jhunjhunwala (beneficiary owner) and others, were engaged in arranging false purchase/sales of invoices of rice and paddy through brokers/dealers of Delhi for availing maximum working capital limits from the consortium banks and diverted working limits for capital expenditure.
Jhunjhunwala has illegitimately diverted the funds to the tune of more than Rs. 600 crore through Kolkata based shell companies to the accounts of associates companies or companies controlled by him using banking channels, later on, part of the above amount approx. Rs. 300 crore was settled through arbitration against taking over of land valued approx. Rs. 22 crore. He also arranged fake bills of iron and steel to the tune of more than Rs. 25 crores and shown it as capital expenditure but received back this amount in cash.
The property under present attachment includes 537 hectares (approx.) of agriculture land at Bikaner, Rajasthan, a portion of immovable property owned in M/s Graintech India Ltd., Budhewal, Ludhiana, land and four wind turbines erected on it at Tehsil Sakri, Distt. Dhule, Maharashtra apart from movable properties in the form of shares, mutual funds and bank deposits.
Earlier, the ED had provisionally attached properties of M/s REI Agro Ltd. in the form of land located at Sonipat of M/s Varrsana Ispat Pvt. Ltd. in the form of machinery and equipments, land and buildings located at Kutch, Gujarat, of M/s Quick Connect Dot Com and its director located at Sainik Farm, New Delhi, totaling worth Rs. 511.48 Crore (approx).
The total attachments, in this case, stand as Rs. 584.74 crore (approx). Jhunjhunwala, Managing Director, M/s REI Agro Ltd. was arrested under section 19(1) of PMLA, 2002 for his involvement in money laundering.
Further investigation is under progress.
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