New Delhi : The Enforcement Directorate (ED) in Hyderabad has provisionally attached movable and immovable properties to the tune of Rs 55.73 crore in a bank fraud case connected to VMC Systems Limited under the provisions of the Prevention of Money Laundering Act (PMLA).
The financial probe agency had initiated an investigation based on an FIR registered by the CBI in Bengaluru under various sections of the Indian Penal Code (IPC) against VMC Systems Limited, its directors, and others for defrauding the Punjab National Bank (PNB) and others to the tune of Rs 539.67 crore.
“The probe revealed that in 2009, VMC Systems approached the PNB and the State Bank of India (SBI) for part financing its working capital requirements.
Thereafter, between 2009 and 2012, VMC Systems availed credit facilities from a consortium of banks consisting of Corporation Bank, Andhra Bank, PNB, and Karur Vysya Bank with SBI as the lead bank, to the tune of Rs 1673.52 crore (principal amount), ” the ED said in a statement issued on Tuesday.
The PNB account of VMC slipped into NPA on December 31, 2013, followed by the remaining bank accounts. In total, the loss to all the banks as on March 31, 2018, was pegged at Rs 1, 745.45 crore.
“The investigation unveiled falsification of accounts and diversion of credit facilities to multiple entities ultimately linked to VMC Systems, leading to the generation of proceeds of crime. The directors of these entities, during the investigation, confirmed the fraudulent nature of these transactions, ” it said.
Additionally, funds were channelled through entities beneficially owned and controlled by individuals associated with VMC Systems and its promoters.
“After its bank accounts turned into non-performing assets, VMC Systems continued its illegal activities by transferring funds, both through its own accounts and those of its associates, to entities under the control of Himabindu and V. Satish Kumar, ” the agency said.
These entities, having dummy directors who were either relatives or long-term acquaintances, served as conduits for the movement of the crime proceeds.
“Upon receiving these funds, they engaged in a series of sham transactions among themselves, aiming to obfuscate the origin and nature of the funds. Further investigation revealed that Satish Kumar and V. Madhavi (Himabindu’s sister), among others, were indicted for wire fraud, tax evasion, and money laundering conspiracy by a district court in Seattle, the US, based on a suit filed by Kyko Global Inc, USA, ” it said.
The Court awarded Kyko $133, 000, 000 due to Prithvi Information Solutions Ltd’s fraudulent conduct and illegal racketeering activity.
“Subsequently, a settlement agreement was reached between Kyko Global and Satish Kumar and Madhavi, transferring assets in the subsidiaries of Prithvi Information Solutions in the US and the stake in a beneficially owned company in India, Bastusilpi Construction Pvt. Ltd., to Kyko Global, ” the ED said.
The assets attached by the ED include residential property of Satish Kumar at Jubilee Hills in Hyderabad; agricultural land situated in Anajpur Village acquired in the name of Rajesh Kotha, an associate of Satish Kumar; a tea estate spread over 580.77 acres of land in Cacher district, Assam, valued at Rs 11.73 crore in the name of Emmel Infra Properties (India) Pvt. Ltd.; and receivables of VMC Systems from the BSNL to the tune of Rs. 37.03 crore.
