The money was later invested and reinvested in HDFC Mutual Fund schemes, eventually becoming 62,914.316 units of HDFC Balanced Advantage Fund.
BENGALURU (India CSR): A Rs. 1 crore transfer made to the Catholic Diocese of Bellary Trust more than 16 years ago has come under the spotlight after the Enforcement Directorate (ED) provisionally attached mutual-fund units now valued at approximately Rs. 3.31 crore. The ED says the original Rs. 1 crore was transferred by Akshatha Minerals Pvt. Ltd. to the Trust on February 13, 2010. According to the agency, the money was later invested and reinvested in HDFC Mutual Fund schemes, eventually becoming 62,914.316 units of HDFC Balanced Advantage Fund.
The value of these units has grown by about Rs. 2.31 crore over the years. The ED has attached the units under the Prevention of Money Laundering Act, 2002, on the ground that the original Rs. 1 crore represented alleged proceeds of crime in a Bank of India loan-fraud case.
Trust Not Accused in ED Release
The ED’s September 1, 2026 press release does not accuse the Catholic Diocese of Bellary Trust, its trustees, office-bearers or beneficiaries of participating in the alleged bank fraud or money laundering. The release identifies the Trust as the recipient of the Rs. 1 crore transfer and records the agency’s claim that the money could be traced through later investments. It does not state that the Trust knew the source of the money was allegedly tainted at the time of the transfer. Similarly, the ED release does not make any allegation against HDFC Mutual Fund or HDFC Balanced Advantage Fund. The attachment concerns the units and the agency’s allegation about the source of the money invested in them.
What ED Has Attached
| Particular | Detail |
|---|---|
| Recipient named in ED release | Catholic Diocese of Bellary Trust |
| Amount transferred | Rs. 1 crore |
| Date of transfer | February 13, 2010 |
| Fund units attached | 62,914.316 units |
| Fund scheme | HDFC Balanced Advantage Fund |
| Value of units as on attachment date | Approx. Rs. 3.31 crore |
| Value growth from original amount | Approx. Rs. 2.31 crore |
| Attachment order date | September 1, 2026 |
Alleged Bank-Fraud Link
The ED investigation started from a CBI FIR against Akshatha Minerals Pvt. Ltd., its directors and others. The company was engaged in trading and exporting iron ore. According to the ED, the company had availed credit facilities of about Rs. 6 crore from Bank of India by creating equitable mortgages over six properties. One property at Jayamahal in Bengaluru was allegedly falsely represented as belonging to late Smt. Lakshmamma. The agency has alleged that forged Khata records, tax-paid receipts, betterment-charge receipts and other revenue records were submitted to the bank to create the mortgage. Bank of India allegedly disbursed Rs. 3 crore against this property.
The ED has linked Rs. 1 crore transferred from Akshatha Minerals to the Catholic Diocese of Bellary Trust to the alleged proceeds of crime in this case. This remains an allegation under investigation and has not been finally decided by a court.
Why the Units Are Worth Rs. 3.31 Crore
The case is unusual because it involves a long financial trail. The ED says the Rs. 1 crore did not remain in a bank account. It was invested and reinvested through different HDFC Mutual Fund schemes over the years. The agency claims that it was able to identify the original amount despite these changes in investment. It says the mutual-fund units now worth Rs. 3.31 crore represent both the original Rs. 1 crore and the gains earned on it. In practical terms, the ED’s position is that if the original amount is found to be proceeds of crime, the returns earned from that money can also be attached under the PMLA.
Attachment Is Not Final Confiscation
The ED issued the order under Section 5(1) of the PMLA. A provisional attachment prevents the sale, redemption, transfer or disposal of the identified property while the case proceeds. It is not a final confiscation order and does not establish criminal guilt. The attachment must go through the legal process prescribed under the PMLA, including review by the Adjudicating Authority. The concerned parties may also avail themselves of legal remedies.
The ED had earlier filed a prosecution complaint before the Special Court, Bengaluru, on March 28, 2026. Further investigation is continuing. The matter is important because it shows how a recipient institution can become connected to an investigation when funds received long ago are later alleged to have originated from a financial crime. At present, the official record identifies the Catholic Diocese of Bellary Trust as the recipient of the 2010 transfer; it does not allege that the Trust committed an offence.
