The Enforcement Directorate (ED), Lucknow zonal office has provisionally attached 86 agricultural lands, covering around 73.34 hectares and valued at ₹31.94 crore, linked to Kanpur-based firm Shri Lakshmi Cotsyn Limited in a fraud case totalling over ₹7,377 crore. The attachment, under the Prevention of Money Laundering Act (PMLA), 2002, was confirmed by ED officials on Tuesday.
Officials said that the fraud involved unpaid loans of ₹7,377 crore, which were declared fraudulent by the Reserve Bank of India (RBI). The National Company Law Tribunal (NCLT) appointed a resolution professional (RP), who liquidated the company’s assets. The attached properties, situated in Bhatapara and Baloda Bazar in Chhattisgarh, include agricultural land registered under the names of company employees and other associates.
The ED’s investigation began after a 2021 FIR by the Central Bureau of Investigation (CBI), filed following a complaint by Rajeev Khurana, deputy general manager of Central Bank of India’s SAM branch in New Delhi. The FIR names Shri Lakshmi Cotsyn Limited, its top executives, and others for alleged cheating, conspiracy, forgery, and breach of trust from 2010 to 2018.
The investigation revealed that the company secured funding from a consortium of 23 banks, led by the bank, to manufacture various textiles, including suiting, shirting, and technical fabrics. Due to financial mismanagement, these accounts were classified as non-performing assets (NPA) as per regulatory norms. A forensic audit suggested the company inflated inventories, manipulated auction processes, and conducted large transactions with undisclosed related parties. It also provided significant discounts totalling ₹207.29 crore to various entities, including non-existent customers.
{{/usCountry}}The investigation revealed that the company secured funding from a consortium of 23 banks, led by the bank, to manufacture various textiles, including suiting, shirting, and technical fabrics. Due to financial mismanagement, these accounts were classified as non-performing assets (NPA) as per regulatory norms. A forensic audit suggested the company inflated inventories, manipulated auction processes, and conducted large transactions with undisclosed related parties. It also provided significant discounts totalling ₹207.29 crore to various entities, including non-existent customers.
{{/usCountry}}Following an NCLT order, the company’s assets, worth approximately ₹265.44 crore, were liquidated. The ED’s probe also uncovered fund diversions to another group company, Shri Lakshmi Power Ltd., with these funds later used to purchase land in the names of employees and tribal individuals in Chhattisgarh. The ED investigation into the case is ongoing.