ED questions son of ex-treasurer of NCP in money-laundering probe

The ED sources said Manish, a former legislator, was posed queries by the agency to verify allegations related to diversion of the unpaid loan funds, the proceeds of crime in the case, for non-sanctioned purposes including creation of assets in the name of the accused persons

MUMBAI: The Enforcement Directorate (ED) on Tuesday questioned Manish Jain Lalwani, the son of Nationalist Congress Party (NCP)’s former Rajya Sabha member and one-time party treasurer Ishwarlal Jain Lalwani, in Nagpur for several hours as part of its money-laundering investigation.

ED questions son of ex-treasurer of NCP in money-laundering probe

The probe is related to suspected bank fraud, involving three Jalgaon-based jewellery firms, their promoters and directors for causing a loss of ₹352.49 crore to the State Bank of India.

Ishwarlal Jain is perceived to be close to the party chief Sharad Pawar.

The ED’s investigation pertains to alleged bank fraud committed by the three jewellery firms—Rajmal Lakhichand Jewellers Private Limited, R L Gold Private Limited and Manraj Jewellers Private Limited—and their promoters, directors and guarantors, Ishwarlal Jain Lalwani, Manish Jain Lalwani, Pushpa Devi and Neetika Manish Jain.

The ED’s money-laundering investigation is based on three FIRs registered by the Central Bureau of Investigation (CBI) in December 2022 in Delhi. The ED probe also found that the promoters allegedly failed to produce any supportive document to prove genuine utilisation of the loans.

The ED sources said Manish, a former legislator, was posed queries by the agency to verify allegations related to diversion of the unpaid loan funds, the proceeds of crime in the case, for non-sanctioned purposes including creation of assets in the name of the accused persons.

The ED sources said Manish was asked about the findings of its probe, in which he is under the scanner along with the other co-accused. Manish is believed to have denied any wrongdoing on his part.

The agency has found that the loans had been allegedly routed through a convoluted web of bogus sale-purchase transactions through related parties of the Rajmal Lakhichand Group and finally invested in immovable properties by the promoters.

“New jewellery business in the name of R L Enterprises and new investments were made in the real-estate sector, in car-dealership and setting up of a hospital,” a source said.

The ED probe also revealed suspicious documents, which were recovered from the mobile phones under the scanner in the case, indicating about an alleged Foreign Direct Investment proposal of 50 million Euros from a Luxemburg-based entity in a real-estate company controlled by Manish, sources said.

Details of 60 other properties belonging to the Rajmal Lakhichand Group were gathered by the ED in its searches conducted by it last week in the case, which are estimated to be worth ₹50 crore.

The agency has also under its scanner two benami properties that are allegedly beneficially owned by the Rajmal Lakhichand Group/Manish and located in Jamner, Jalgaon, and surrounding areas, sources said.

The SBI had complained to the CBI that the accused firms and persons associated with them had intentionally defaulted on their loans, causing wrongful loss to the tune of ₹352.49 crore (plus interest thereon) to it. The CBI had registered its cases on receipt of complaint from the SBI’s Stressed Assets Resolution Group Commercial (III), Mumbai.

The ED’s probe revealed that purposefully, no books of accounts, ledgers, stock registers, invoices or any supportive documents were maintained for the period Financial Year 2003-2014 (the loan disbursement period), sources said.

“The ED’s investigation revealed that the promoters of the firms had colluded and engaged in fictitious transactions and fabrication of the books of accounts of the three accused firms and their related entities,” said an ED source.

The agency’s analysis of the books of accounts of the firms revealed that their stock on August 17 (Thursday) was brought to zero in spite of them having been hypothecated to the SBI, the source said.

A fictitious entity, with their relatives as dummy directors, was allegedly created to apply for new loans fraudulently, according to the probe.

The ED probe found that bogus sale-purchase transactions had allegedly been shown in the books of accounts with the main holding company, Rajmal Lakhichand Jalgaon Partnership Firm. A large amount of stock in trade was allegedly found to be completely missing.

Against a declared stock of more than 1,284 kg of jewellery, the ED could only trace around 40 kg last week. The loans taken against the declared stock were therefore allegedly siphoned off by showing bogus purchases for non-existent jewellery, according to the agency.

The alleged irregularities in the transactions of the three accused firms with the SBI pertained to 2003-2014.

The agency had conducted searches last Thursday at the official-residential premises at 13 locations in Jalgaon, Nashik and Thane belonging to the three accused firms and their promoters, directors and guarantors. The ED on Saturday said that it seized proceeds of crime worth ₹25.81 crore, including gold-diamond jewellery and cash.