ED attaches ₹11.07 cr assets in FCCB fraud

ED has provisionally attached assets worth ₹11.07 crore from Geodesic Limited in a money-laundering probe linked to defrauding FCCB holders of USD 125 million.

MUMBAI: The Mumbai unit of Enforcement Directorate (ED) has attached provisionally assets worth ₹11.07 crore as part of its money-laundering investigation against a private firm, Geodesic Limited, and others in connection with a case related to the alleged defrauding of holders of Foreign Currency Convertible Bond (FCCB), of USD 125 million. A FCCB is a bond issued in a currency other than the company’s home country.

ED attaches ₹11.07 cr assets in FCCB fraud

The attachments were made on Thursday and comprised residential flats, commercial and agricultural land along with bank fixed deposits in the name of various companies and persons, located in Maharashtra, Gujarat and Uttar Pradesh.

ED had initiated its investigation based on a case registered by the MIDC police station in Mumbai under various sections of the Indian Penal Code against the directors of M/s Geodesic Limited, Prashant Mulekar, Kiran Kulkarni, Pankaj Srivastava and their tax consultant, Dinesh Jajodia. The ED had arrested all four persons in the case and, also, attached immovable assets worth ₹57.14 crore in the case via issuance of five provisional attachment orders.

ED’s investigation revealed that the firm had allegedly raised FCCB from foreign investors through a London-based bank as trustee, worth USD 125 million in 2008, for the purpose of overseas acquisition and investment in a joint venture. The FCCB funds, however, were allegedly misappropriated and misutilised for investment/lending activities in other overseas companies and transferred to the Indian accounts of the firm with the intention to siphon off the funds, according to ED.

The firm is accused of diverting FCCB holders’ money by entering into fictitious sale/purchase of software from major shell companies and of transferring funds into shell companies and further to other entities in the garb of business transactions. ED’s probe further revealed that such transactions allegedly aimed at financial manipulation. Proceeds retained by such entities were attached under the Prevention of Money Laundering Act, 2002, to prevent its alienation/transfer/sale, according to ED officials.

In another money-laundering case, ED’s Mumbai unit attached provisionally immovable properties worth ₹13 crore belonging to the directors of a private firm, Spectra Industries Limited, and others, on Thursday. The attached properties included residential flats and commercial offices in Mumbai.

ED had initiated its investigation based on a case registered by the Central Bureau of Investigation (CBI), Mumbai, against the firm and others, on receipt of a complaint from the Bank of India related to the alleged defrauding of a consortium of banks of ₹27.6 crore. The accused had allegedly caused a loss to the banks by diverting loan funds through fraudulent transactions and circular trading, after which the CBI filed its chargesheet in the case.