ED Freezes Assets Worth Rs 209 Crore in Massive Rs 4,000 Crore Bank Fraud Case

NAGPUR (India CSR): In a significant development, the Enforcement Directorate (ED) has frozen assets worth Rs 209 crore and seized Rs 55 lakh in cash, marking a critical juncture in a sprawling Rs 4,000 crore bank fraud case linked to Maharashtra businessman Manoj Jayaswal and his entity, Corporate Power Limited (CPL). The ED has classified these assets as proceeds of crime (POC) in what has been one of the most extensive financial investigations in recent years.

Unveiling the Scale of the Fraud

The ED’s investigation has exposed a complex web of financial malfeasance, where Rs 4,000 crore was allegedly siphoned from a Public Sector Undertaking (PSU) bank. When factoring in interest, the total fraud amount escalates to over Rs 11,300 crore, making it one of the largest banking scams in Indian history.

Breakdown of Seized Assets

The frozen assets include a diverse portfolio comprising shares of listed companies, mutual funds, and fixed deposits. Additionally, Rs 55 lakh in cash was also seized during the operation. The ED’s action underscores the breadth and depth of financial irregularities orchestrated by Jayaswal’s companies, particularly under the aegis of CPL.

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Involvement of Family and Shell Companies

Manoj Jayaswal’s sons, Abhijeet and Abhishekh Jayaswal, are also under the ED’s scanner, with cases filed against them. The investigation revealed that the Jayaswal family employed an intricate network of 250 shell companies and 20 charitable organizations as vehicles for money laundering. This vast network was instrumental in concealing the illicit flow of funds and creating layers of financial opacity.

Nationwide Raids and Asset Seizures

The ED’s recent raids on the company’s premises in Nagpur, Kolkata, and Vishakhapatnam over two days led to the discovery of these frozen assets. These raids are part of a broader strategy to dismantle the financial infrastructure that facilitated the large-scale defrauding of the Union Bank.

Jayaswal’s Rise and Fall

Manoj Jayaswal, once a prominent figure in the business community, headed the Abhijeet Group of companies. His companies were major beneficiaries of the UPA government’s controversial coal block allocation scheme. However, the same companies later became notorious for defaulting on massive loans, turning them into non-performing assets (NPAs). Corporate Power Limited, one of Jayaswal’s entities, borrowed heavily from Union Bank, only to default spectacularly, leaving a trail of financial ruin.

Manipulation and Diversion of Funds

The Central Bureau of Investigation (CBI) had earlier registered a case against the promoters of CPL for manipulating project costs and financial statements to secure loans. These funds were then diverted for purposes other than those stated, causing a loss of Rs 4,000 crore to Union Bank, which ballooned to Rs 11,379 crore with interest. The ED’s probe also uncovered additional bank frauds involving Rs 136 crore and Rs 180 crore through other group companies, Corporate Ispat Alloys Limited (CIAL) and Abhijeet Integrated Steel Limited (AISL).

Fictitious Transactions and Charitable Institutions

Further investigation by the ED revealed that the company’s promoters were engaged in booking fictitious transactions in their books of accounts, using related entities to bolster financial statements artificially. The 250 shell companies created by the Abhijeet Group were pivotal in these fraudulent activities, helping to layer and integrate the proceeds of crime. Moreover, 20 charitable institutions were identified as conduits for laundering money, with funds parked in immovable properties, shares, and mutual funds.

The Aftermath of the Coal Allocation Scandal

Manoj Jayaswal first gained national attention over a decade ago when the coal allocation scam broke out. The Abhijeet Group was a significant player, having been allotted multiple coal blocks. However, the company’s fortunes took a downturn after the coal blocks were repossessed, leading to loan defaults and the eventual filing of loan diversion cases.

The ED’s latest action against Manoj Jayaswal and his entities marks a critical step in addressing one of India’s largest banking frauds. As investigations continue, the full extent of the financial irregularities and their impact on the banking sector is expected to unravel, shedding light on the systemic failures that allowed such a massive fraud to occur.

इसे हिंदी में भी पढ़ें: महाराष्ट्र के कारोबारी मनोज जयसवाल पर ED का शिकंजा, 4,000 करोड़ की धोखाधड़ी में संपत्ति जब्त