ED seizes assets worth ₹1.11 crore in mineral fund scam probe
The case centres on accusations that DMF contractors, in collusion with Chhattisgarh state officials and "political executives", siphoned off public funds
Mumbai:The Enforcement Directorate (ED) has seized and frozen movable assets, including cash and bank balances, valued at approximately ₹1.11 crore during searches conducted across Maharashtra and Chhattisgarh. The operation is part of a money-laundering investigation into the alleged District Mineral Fund (DMF) scam.
The case centres on accusations that DMF contractors, in collusion with Chhattisgarh state government officials and "political executives", siphoned off public funds, according to ED sources. The searches, carried out on Friday and Saturday under the Prevention of Money Laundering Act (PMLA), targeted four locations across the two states.
DMF is a trust funded by miners, established in all districts of Chhattisgarh to benefit those affected by mining-related projects and activities.
The agency initiated its investigation based on three cases registered by the Chhattisgarh police under various sections of the Indian Penal Code. These cases alleged the misappropriation of public funds by certain DMF contractors in collaboration with state government officials and political figures, with claims of corruption in the utilisation of DMF funds.
The ED's investigation has reportedly uncovered that some contractors paid substantial commissions or illegal gratification to officials and political executives, typically ranging from 25 to 40 per cent of the contract's value. Sources suggest that the cash used for these kickbacks was generated by vendors using accommodation entries—a financial transaction between two entities where one entity records the transaction in its books to accommodate the other for cash of equal amount, plus a commission.
The agency's searches focused on certain entry providers and their patrons, uncovering various incriminating details, numerous dummy proprietorship entities, and significant cash holdings. The operation resulted in the seizure of ₹76.50 lakh in cash and the freezing of eight bank accounts belonging to entry provider firms, with a combined balance of around ₹35 lakh.
Additionally, the ED seized various stamps belonging to dummy firms, along with other incriminating documents and digital devices, which are currently being scrutinised for their evidentiary value.
This case has brought to light potential widespread corruption in the management of funds meant for mining-affected communities. As the investigation progresses, it may have significant implications for governance and financial oversight in Chhattisgarh's mining sector.
The DMF scam allegations underscore the ongoing challenges in ensuring transparent and effective utilisation of public funds, particularly those earmarked for community development in resource-rich regions. The ED's actions signal a heightened focus on financial improprieties involving government schemes and public-private partnerships.