ED attaches assets worth ₹60.44 cr in Malaika Credit Society fraud

The Enforcement Directorate has attached 48 assets worth INR60.44 crore ($8.14m) as part of a money laundering investigation into an alleged fraud at a multi-state cooperative credit society in India. Gilbert Baptist, who controlled the credit society through dummy directors, had diverted funds to the tune of INR200 crore belonging to thousands of depositors, to his private business enterprises, and to acquire properties for himself, his family members and aides, the agency said. The assets include flats, shops and land parcels in various parts of Maharashtra and Karnataka.

MUMBAI: The Enforcement Directorate (ED) has provisionally attached 48 assets worth ₹60.44 crore as part of its money laundering probe related to an alleged fraud at a multi-state cooperative credit society operated from Mira Road, Thane.

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The agency had initiated an investigation into the financial fraud based on an FIR and two charge sheets filed by the Mira Road police against the office bearers of the credit society.

According to the agency, Gilbert Baptist, who controlled the credit society through dummy directors, had diverted funds to the tune of ₹200 crore, belonging to thousands of depositors, to his private business enterprises, and to acquire properties for himself, his family members and aides.

The attached assets include flats, shops and land parcels in various parts of Maharashtra and Dakshin Kannada district of Karnataka, ED sources said. The assets were purchased in the name of Baptist, Marceline Baptist, Elcy Rodrigues, Reena Jose, Manohar Shetty, Sushant Sabat, Malaika Starcity Project, Malaika Appliances Pvt Ltd (MAPL), Yasoma Industries and Yasoma Wedding Sarees etc.

The agency had earlier arrested Baptist, who is in judicial custody presently.

He had set up the credit society, Malaika Multi-State Cooperative Credit Society (MMCCS), in 2010 along with another person.

Baptist, who was the society’s chairman, began appointing various dummy directors to run the MMCCS as “a one-man show,” the source said.

The investors were thereafter lured to deposit their savings in multiple schemes with promises of lucrative returns. But instead of investing the deposits in secure businesses or instruments, Baptist had diverted the majority of the funds to his own business ventures, the source added.

“Baptist had opened various businesses in the names of MAPL, Yasoma Industries, Yasoma Wedding Sarees and Malaika Starcity Project, among others, and those were run using the deposits received by MMCCS,” the ED source said. “His business ventures lost money and soon the accounts of MMCCS became non-performing assets, resulting in losses to thousands of innocent investors,” the source added.

An ED source said, “The proceeds of the crime acquired by diversion of depositors’ money, was used to create immovable properties in Maharashtra and Dakshin Kannada that were identified and attached.”

The ED investigation revealed that the auditors of the credit society had pointed out several irregularities during annual audits, which were ignored by Baptist and his aides, the source said and added that no prudent financial norms for sanctioning loans were followed.