A 60-member team of Enforcement Directorate (ED) on Friday carried out predawn searches at 14 premises in western Maharashtra in connection with a money laundering case. The 14-hour raids on residences, offices and shops belonging to Dinesh and Suresh Parekh, members of a prominent business family in Sangli, led to the seizure of property documents, account books and financial records, including bank passbooks.
Office of Rajarambapu Sahakari Bank Ltd also raided
The office of Rajarambapu Sahakari Bank Ltd (RSBL), linked to NCP state president Jayant Patil in Sangli, was also raided. The ED is investigating a decade-old case of nearly Rs1,000 crore scam involving alleged dubious sales tax refunds procured by a few private firms. Preliminary investigation has estimated that dubious Value-Added Tax (VAT) refunds withdrawn by the suspected firms exceed Rs1,000 crore. Earlier the Parekh brothers were investigated by the GST, Customs and Sales Tax Department for tax evasion. Both are allegedly close to NCP leader Jayant Patil, who was questioned extensively by the ED last month.
Irregularities not reported by the bank
According to the probe, the private business and trading firms had availed dubious and fake VAT refunds, which were credited in suspect accounts in RSBL. The refunds were withdrawn in cash from the accounts immediately after they were credited the same day and the irregularities were never reported by the bank. “Cash withdrawals of Rs 30 crore every month should have been reported by the bank to the central bank and nodal Financial Intelligence Unit office,” an official said.
Chartered accountants allegedly opened shell companies
It is mandatory for all banks to report suspicious cash withdrawals and transactions to the Financial Intelligence Unit of the Ministry of Finance to prevent money laundering and black money circulation. The ED suspects the cash withdrawals were to pay kickbacks for contracts and business expansion. Chartered accountants allegedly opened shell companies and banks accounts in RSBL with forged KYC documents to launder tax credit inputs and claims.