Bombay high court suspends LOC against Manish Mandhana

The CBI had registered an FIR against the Mumbai-based Mandhana Industries (now GB Global Ltd) in 2023 for allegedly defrauding a consortium led by Bank of Baroda of ₹975.08 crore

MUMBAI: The Bombay high court recently allowed Manish Mandhana, former director of Mandhana Industries Ltd accused in a money laundering case, to travel to New York and London while suspending the lookout circular issued against him.

Bombay High Court. (HT Archives)

A division-bench of justice A S Chandurkar and justice Dr Neela Gokhale were listening to a plea by the textile magnate on May 9 seeking permission to travel to New York to attend his son’s convocation ceremony and then USA to London to meet his daughter. Manish was permitted to travel from Mumbai to the two cities between May 14 and June 2, stated the court while allowing his application.

The CBI had registered an FIR against the Mumbai-based Mandhana Industries (now GB Global Ltd) in 2023 for allegedly defrauding a consortium led by Bank of Baroda of ₹975.08 crore. The CBI action was based on a complaint from the bank which alleged that former managing director Purushottam Chhaganlal Mandhana, former executive director Manish Biharilal Mandhana, and a few others defrauded the consortium in a well-knit criminal conspiracy to funnel funds.

The 39-year-old company controlled by the Mandhana family started availing credit facilities from the Bank of Baroda in 2008. On December 31, 2016, the account was declared a non-performing asset. The banks ordered a forensic audit which exposed several irregularities, including diversion of funds to settle inter-corporate debts, not using a Trust and Retention Account (TRA) to route ₹420.39 crore during July 2016-September 30, 2017, and fictitious purchases.

The Enforcement Directorate (ED) in 2024 carried out an investigation based on the CBI’s FIR, which proved Manish, who was the director of the company from 2002 to 2019, allegedly conspired with the other directors of the company and caused a wrongful loss to the banks for personal enrichment, agency sources said. ED’s probe revealed that he had incorporated numerous fictitious entities as employees and used them for diverting, and layering of the funds of MIL, including the loan funds.

ED’s probe also revealed that the accused allegedly made bogus sales purchases with different entities and diverted funds from the accounts of MIL, including the loan funds, to pay off his debts and those of his family members, agency sources said.