Nagpur: The Enforcement Directorate (ED) has frozen assets worth Rs 209 crore and seized Rs 55 lakh in cash from Nagpur businessman Manoj Jayaswal entity — Corporate Power Limited (CPL). The ED described the assets as Proceeds of Crime (POC) from a loan fraud in which Rs 4,000 crore were allegedly diverted from a PSU bank. The fraud amount goes beyond Rs 11,300 crore if the interest is added, according to a press release issued by the ED.
The financial assets seized include shares of listed companies, mutual funds, and fixed deposits, apart from Rs 55 lakh in cash, it added.
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Tuesday 12 Nov. 2024
Cases have been booked against Jayaswal’s sons, Abhijeet and Abhishekh, too.
The ED carried out raids at 14 premises of M/s Corporate Power Limited company and its promoters Manoj Jayaswal, Abhijeet Jayaswal, Abhishek Jayaswal and others in connection with money laundering linked to Rs 4,037-crore alleged bank loan fraud. The agency on Wednesday stated that it has seized/freezed FDs, demat accounts and mutual funds amounting to Rs 209 crore.
According to the agency, the accused entity Corporate Power Ltd. is a Special Purpose Vehicle of Abhijeet Group, exclusively incorporated in the year 2006 for the Power Venture in Jharkhand.
The ED initiated a money laundering probe in the case based on an FIR registered by the CBI, New Delhi, in December 2022 under sections 120-B, 420 and 471 of IPC and 13(2), 13(1)(d) of Prevention of Corruption Act, 1988 against M/s Corporate Power Limited and its promoters/Directors.
The case was filed on the complaint of Union Bank of India. After FIR, the CBI also carried out raids in cities, including Nagpur, Mumbai, Ranchi, Kolkata, Durgapur, Ghaziabad, and Vishakhapatnam. In the CBI’s complaint it was said that M/s Corporate Power Ltd. submitted manipulated project cost statements to avail loans and also diverted the bank funds for personal benefit.
In 2019, the bank declared the accounts as fraud and a complaint was lodged with the CBI in 2022. The period of crime is the financial year 2009 to September 30, 2013. In 2013, the loan turned into non-performing assets (NSA) and the proceeds of the crime is Rs 4,037 crore, ED press release stated.
The ED probe revealed that Abhijeet Group had created an intricate web of shell entities that were being used by the accused promoters for the layering, integration and utilisation of the proceeds of crime. A network of charitable institutions was used for the purpose of money laundering of the proceeds of the crime. Dummy directors were employed by Abhijeet Group, usually the employees of the group and Dormant companies were found used as holding companies, the agency said.
The central agency also identified unencumbered immovable assets worth Rs 50 crore derived from the proceeds of the crime, the ED stated.
Jayaswal headed the Abhijeet Group of companies, which was among the biggest beneficiaries of the UPA regime’s controversial coal block allocation scheme. Abhijeet Group was also ranked among the country’s top bank defaulters. The companies were sitting on huge debt, which ultimately turned into NPAs. CPL was one of the entities that had borrowed from Union Bank but ended up in a default. Known for his flamboyant lifestyle, Jayawal had also purchased a private jet which is now grounded at the Nagpur airport after a loan default.
The CBI had registered a case against the CPL promoters for manipulating the project cost and other financial statements to avail loans. The loan amount was later diverted to purposes other than stated, leading to a loss of Rs 4,000 crore to Union Bank, says the press release. With interest, the amount comes to Rs 11,379 crore. Apart from CPL, two more bank frauds worth Rs 136 crore and Rs 180 crore were committed through two more group companies – Corporate Ispat Alloys Limited (CIAL) and Abhijeet Integrated Steel Limited (AISL) respectively, said the release.
