The Enforcement Directorate (ED) has arrested Purushottam Mandhana, 70, the promoter and chairman of Palghar-based textile firm, Mandhana Industries Ltd (MIL), in a Rs975 crore bank fraud case. He was produced before the special court where he was remanded to ED custody till July 25.
In August last year, the deputy general manager of Bank of Baroda (BoB) had approached the CBI with a complaint of loss of Rs975 crore faced by a consortium of nine banks (led by BoB) owing to MIL loan accounts turning non-performing assets. After the CBI registered a case, the ED initiated a money laundering probe, later alleging that Mandhana and his family members siphoned off the loan funds for personal enrichment.
The ED claimed to have scrutinised nearly 200 bank accounts of MIL, revealing that substantial funds were transferred to another company, M/s Azarel Fashion Pvt Ltd, a fictitious entity incorporated by MIL in the name of its employees to layer diverted funds.
As per the investigating agency, funds from Azarel were further diverted to M/s Swarathma Gartex Pvt Ltd, a company incorporated at the behest of Purushottam Mandhana. The funds were also transferred to M/s Balaji Corporation, a sister company of MIL, and then to various investment / broker companies.
The ED further claimed unravelling entities like Assem Multitrade Pvt Ltd and Munirabad Trading Corporation Ltd, which were merely paper entities, providing accommodation entries worth crores of rupees to MIL under the guise of fake sales and purchases. An accommodation entry is where one party enters the financial transaction in its books to accommodate the other party in lieu of cash of equal amount and commission charged over and above at a certain fixed percentage.
At the behest of Mandhana, accommodation entries for circular trading were allegedly made in entities like M/s Mynah Industries Pvt Ltd, M/s Bhadresh Trading Corporation Pvt Ltd, M/s Craze Clothing Pvt Ltd, M/s Helios Mercantile Pvt Ltd, M/s Nava T Corporation Pvt Ltd, M/s Annapurna Pet Pvt Ltd.
During the probe, the ED claimed that Mandhana admitted incorporating fictitious companies to layer loan funds.
After registration of the case, the ED conducted raids at various premises and seized luxurious watches worth Rs75 lakh, gold and diamond jewellery worth Rs 3.54 crore, and luxury cars worth Rs84.5 lakh, besides cash.
