ED Moves To Restore ₹55.85 Crore Worth Of Attached Assets To SBI In Varron Aluminium Money Laundering Case

Mumbai: The Enforcement Directorate’s (ED) Mumbai Zonal office has begun the process of restoring immovable properties valued at Rs 55.85 crore to the State Bank of India (SBI) in connection with its money laundering probe against Varron Aluminium Pvt Ltd (VAPL). The properties, provisionally attached under Section 5 of the Prevention of Money Laundering Act (PMLA), were seized after the agency concluded that the company, along with its group entities and individuals, had allegedly cheated the bank and siphoned-off funds for personal gain.

The agency’s probe is based on FIRs registered by the CBI’s Banking Securities & Fraud Cell (BS&FC) Mumbai, against VAPL and others for allegedly defrauding Bank of India (BOI) and SBI of Rs 293.74 crore and Rs 401.25 crore respectively. According to the CBI chargesheet, a manual letter of credit (LC) of Rs 300 crore was issued by Canara Bank on behalf of VAPL in favour of its group firm Varron Autocomp Pvt Ltd (VACPL). The LC was later discounted by BOI on the basis of fake documents, without due verification.

The ED investigation revealed that payments for each LC were made by opening fresh LCs in the names of VAPL, VIPL (Varron Industries Private Limited,) and various shell entities, a mechanism allegedly adopted from the very first LC issued. The funds were circulated in a cyclical manner to repay old loans, reduce cash-credit liabilities of VAPL and its group companies across multiple banks, and artificially inflate the company’s books. The agency said it had identified substantial proceeds of crime (PoC) during the probe and subsequently issued two attachment orders covering immovable properties worth Rs 179.27 crore.

Section 8(8) of the PMLA provides for the restitution of attached or confiscated properties to rightful owners, legitimate claimants and victims of money laundering. ED officials said the provision is increasingly being used to restore assets to innocent parties when it is established that the properties were acquired through fraud but legally belong to victims.

The ED said it continues to work toward such restitution and encourages banks and financial institutions to use this provision to reclaim assets lost due to fraud.

Building on the ED’s ongoing efforts to facilitate restitution for legitimate claimants, SBI filed a miscellaneous application before the Special PMLA Court in Mumbai under Section 8(8) of the PMLA, seeking the restoration of three attached properties valued at Rs 55.85 crore (as per the 2021 valuation).

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During the proceedings, the ED submitted an affidavit expressing its no objection to the restitution sought by the bank. Following this, the Special PMLA Court, through an order dated September 26, 2025, allowed SBI’s application and directed the restoration of the three immovable properties valued at Rs 55.85 crore.

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