ED restitutes properties worth ₹289.54 crore in Pen Urban Co-operative Bank case

ED Mumbai transfers ₹289.54 crore in properties linked to Pen Urban Co-operative Bank fraud to compensate over 2 lakh victims, court approves restitution.

MUMBAI: The Mumbai unit of the Enforcement Directorate (ED) has transferred immovable properties valued at ₹289.54 crore to the Competent Authority under the Maharashtra Protection of Interest of Depositors (MPID) Act. These assets, linked to the Pen Urban Co-operative Bank fraud, will now be liquidated to compensate the victims. The bank—which had over two lakh depositors and 42,000 shareholders—suffered massive losses due to alleged fraudulent activities, according to ED sources.

ED restitutes properties worth ₹289.54 crore in Pen Urban Co-operative Bank case

A special court on Tuesday approved the ED’s application for asset restitution, authorising the restoration of 29 immovable properties to the Competent Authority. These assets will be monetised, and the proceeds will be distributed among the victims of the fraud. “The special court has provided solace to the victim investors of the bank despite charges yet to be framed. This aligns with international best practices, where assets are restored to victims even before trial conclusion,” said an ED official.

Background of the fraud

The ED launched its investigation following an FIR filed by Pen police on March 22, 2011. The investigation uncovered that the bank’s officials, in collusion with auditors, allegedly falsified accounts and created backdated, fake entries. This manipulation resulted in a loss of ₹651.35 crore, affecting 2,01,578 investors. Funds were siphoned off and routed through bogus cash credit accounts, with portions of the proceeds used to acquire “benami” properties in Maharashtra’s Raigad district.

A writ petition by one of the bank’s depositors led to a directive from the Bombay High Court on October 7, 2016, instructing the ED to hand over the attached properties to MPID authorities. Subsequently, on February 1, 2019, the MPID authorities filed an application with the PMLA special court seeking the restitution of the properties. This application was granted on January 14, 2025, facilitating the long-awaited relief for victims.

FATF commends ED’s role in asset restitution

ED’s restitution efforts have secured for India the “best in the class ratings in the Mutual Evaluation” of the FATF. Officials noted that the Financial Action Task Force (FATF), an intergovernmental body combating financial crimes, has commended the ED’s restitution measures. Established in 1989, the FATF evaluates countries on their ability to address money laundering and related offences.

Recent restitutions by ED

Punjab National Bank Fraud Case

In the Mehul Choksi case, the ED’s application enabled the Mumbai PMLA court to approve the monetisation of properties worth ₹2,565.90 crore. The process of transferring assets worth over ₹125 crore to the Liquidator of M/s Gitanjali Gems Ltd has commenced.

Shine City Group Real Estate Fraud

In a separate case involving Shine City Group, the ED successfully appealed to the Allahabad High Court and the PMLA court in Lucknow to restore properties valued at ₹263.55 crore. To date, over 3,300 victim claims have been registered.