Mumbai: The Enforcement Directorate (ED) has filed a prosecution complaint against Purushottam Mandhana, promoter and chairman of Mandhana Industries Ltd (MIL), and 17 others in connection with a Rs 975 crore bank fraud case. The list of accused includes Purushottam, his son Priyavrat, other family members, their three trusts and other firms allegedly used for money laundering. Purushottam was arrested on July 19, while his son was arrested on July 29.
The ED has alleged that members of the Mandana family siphoned off loan funds for their personal benefit. During the investigation, the ED claimed to have collected details of approximately 200 bank accounts associated with MIL. The agency stated that scrutiny of these accounts revealed substantial funds transferred by MIL to a company, M/s Azarel Fashion Pvt Ltd, from where it was transferred to various shell companies.
Furthermore, the ED contended that the shell companies managed by Priyavrat, including Azarel Fashion Pvt Ltd, were used to manipulate the share prices of MIL. “Demat accounts in the names of such entities were opened with different depository participants. These accounts were utilised to undertake off-market trades in the shares of MIL to manipulate the price of MIL shares,” the ED claimed.
The ED's probe began following a complaint by the CBI. The Deputy General Manager of Bank of Baroda approached the CBI in August 2023, alleging that the accused defrauded a consortium of banks to the tune of Rs 975.08 crore.
During the investigation, the ED claimed to have collected details of approximately 200 bank accounts associated with MIL. The agency's scrutiny of these accounts revealed that substantial funds were transferred by MIL to a company, M/s Azarel Fashion Pvt Ltd. However, further it has been revealed that this was a fictitious entity incorporated by MIL in the names of its employees for the purpose of layering diverted funds. Additionally, the agency noted that major funds from Azarel Fashion were diverted to M/s Swarathma Gartex Pvt Ltd, a company incorporated at the behest of Purushottam.
