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₹975.08 crore bank fraud case: ED files chargesheet against Mandhana Industries’ ex-chairman, son and others
The ED charged Purushottam Mandhana and his son in a ₹975.08 crore bank fraud case, summoning 18 accused, with assets worth ₹170 crore provisionally attached.
MUMBAI: The Enforcement Directorate (ED) on Tuesday submitted its chargesheet against Purushottam Mandhana, 70, former chairman and managing director of M/s Mandhana Industries Limited (MIL), his son Priyavrat, 35, in a city special court as part of its money-laundering investigation into the alleged ₹975.08 crore bank fraud case.
Apart from the father-son duo, the ED’s chargesheet also names six firms and a few other members of the Mandhana family. After the agency submitted the chargesheet, the PMLA (Prevention of Money Laundering Act) court issued a process against the 18 accused, including nine persons and nine entities, named in the chargesheet and summoned them for an appearance before the court on November 21. While provisional attachment orders worth ₹170.32 crore were issued by the agency so far in the case.
ED’s probe is based on a case registered by the Central Bureau of Investigation’s (CBI) bank security and fraud branch against the MIL (now GB Global Ltd), Purushottam Mandhana, Manish Mandhana, Biharilal Mandhana, and others, based on a complaint from a public-sector bank — Bank of Baroda (BoB) — alleging them of defrauding a consortium of banks of ₹975.08 crore.
The BoB had alleged that the MIL and its directors had allegedly hatched a criminal conspiracy to cause loss to banks and corresponding wrongful gain to themselves by diverting loan funds through fraudulent transactions and circular trading.
Earlier, in July, ED’s arrest of Purushottam Mandhana had been declared as illegal by the special court on the ground that the agency had failed to provide him with a copy of the document listing “reasons to believe” that he was guilty of the offence, after which the agency approached the Bombay high court in appeal against the order. Last month, the Bombay high court granted bail to Priyavrat Mandhana observing that the ED did not have sufficient reasons to arrest him in the case.
ED’s investigation in the case revealed that Purushottam Mandhana and others allegedly conspired to cause wrongful loss to the banks. It was alleged that he had incorporated numerous fictitious entities in the name of his employees and used such entities for layering of funds of MIL, including the loan funds. It was also alleged that he made bogus sales and purchases with different entities.
The investigation further revealed that the alleged proceeds of crime (POC) generated in the case were camouflaged through layering and movement via multiple bank accounts of different bogus sister concerns of MIL, and personal bank accounts of the Mandhana family members. A large amount of POCs was allegedly utilised by the Mandhana family to pay off their debts, invest in the share market, buy properties and jewellery, ED claimed. Further, ED’s probe also revealed that the shares of MIL were allegedly bought and sold in trading and demat accounts of different bogus companies, to rig the share prices and fool the banks and the shareholders at large, the agency claimed.
ED recently provisionally attached assets worth ₹170 crore belonging to Purushottam Mandhana, and others, in the case. The attached assets included movable properties, including bank balances of ₹55 lakh, gold and diamond jewellery valuing ₹41 lakh, shares/securities/sovereign gold bond /corporate bonds worth ₹13 crore, three high-end cars valued at ₹84.5 lakh and expensive watches worth ₹70 lakh. The attached properties also included residential flats and commercial office spaces in Mumbai, Thane, Raigad and Bengaluru.
