Mumbai, June 16: The Enforcement Directorate (ED) on Tuesday carried out extensive searches across Delhi and Maharashtra as part of an ongoing money laundering investigation linked to alleged irregularities in a corporate insolvency resolution process, officials said.
According to sources, the agency conducted raids at 17 locations associated with Suraksha Asset Reconstruction Company Ltd (SARCL), Suraksha Realty Ltd, Khyati Realtors Pvt Ltd, their promoters, directors and employees, as well as a former employee of YES Bank. The searches were undertaken in Mumbai, Khandala in Maharashtra and several locations in Delhi.
Officials said the operation forms part of a broader probe into suspected financial misconduct and irregularities involving the acquisition and resolution of stressed assets through the insolvency process. The companies concerned could not be reached immediately for their response to the ED action.
Probe Focuses On Alleged Irregularities In Stressed Asset Transfers
According to ED sources, the probe centres on the alleged fraudulent assignment of the distressed YES Bank loan account of Mackstar Marketing Pvt Ltd, along with several other stressed loan accounts transferred during FY 2016-17 and FY 2017-18. The agency suspects that certain transactions were structured through a network of circular dealings involving asset reconstruction companies (ARCs) and bank officials to facilitate the takeover of distressed assets.
Officials said the searches were aimed at gathering evidence related to alleged money laundering involving suspected collusion between certain ARCs and YES Bank officials. The agency is examining whether stressed assets were transferred and acquired at undervalued prices, resulting in losses to lenders and other stakeholders, and whether the insolvency resolution process was manipulated through inflated or fraudulent claims.
ED Examining Creditor Voting And Insolvency Proceedings
The ED is also scrutinising the exercise of creditor voting rights during proceedings before the National Company Law Tribunal (NCLT) and examining whether the Corporate Insolvency Resolution Process (CIRP) was compromised. Sources said investigators are analysing financial transactions, internal communications and records relating to the acquisition and resolution of stressed assets.
The ED probe has its origins in loan transactions involving Mackstar Marketing Pvt Ltd, a company linked to the erstwhile Housing Development and Infrastructure Ltd (HDIL) group. During insolvency proceedings, questions were raised regarding the utilisation of loans sanctioned by YES Bank. According to allegations examined during those proceedings, a substantial portion of the loan proceeds was allegedly routed to HDIL group entities and used to meet liabilities of related parties rather than for the purposes for which the loans had been sanctioned.
After the account was classified as a non-performing asset, YES Bank assigned the debt to Suraksha ARC, which subsequently initiated insolvency proceedings against Mackstar under the Insolvency and Bankruptcy Code (IBC). The transaction later came under judicial scrutiny.
NCLAT Had Raised Concerns Over Transaction Structure
In September 2022, the National Company Law Appellate Tribunal (NCLAT) set aside the insolvency proceedings against Mackstar, observing that the underlying transactions appeared “collusive in nature” and raising questions over whether the claim constituted a valid financial debt under the IBC. The appellate tribunal also expressed concerns over the structure of the transactions and held that the insolvency process could not be sustained on the basis of such arrangements.
According to ED sources, investigators are examining whether the Mackstar transaction formed part of a broader pattern involving the assignment and resolution of other stressed loan accounts. The agency suspects that similar mechanisms may have been used to acquire distressed assets through structured transactions involving related parties, allegedly resulting in undue gains to certain entities and losses to other stakeholders.
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Officials said documentary and digital evidence recovered during the searches would be analysed to determine the extent of the alleged collusion between ARC officials, bank functionaries and other entities involved in the transactions.
The companies concerned could not immediately be reached for comment. Searches were continuing till late evening, and details of any seizures or recoveries were awaited.
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