K'taka ALPL Money Laundering Case: ED Probe Finds Fund Diversion To Panama, Costa Rica

(MENAFN- IANS) Bengaluru, Sep 17 (IANS) The Enforcement Directorate (ED), Bengaluru Zonal Office, has filed a charge sheet before the Special Court (PMLA), Bengaluru, against Associate Lumbers Pvt Ltd (ALPL) and 17 others in connection with a Rs 122 crore bank fraud case, the agency said on Wednesday.

ED initiated an investigation based on an FIR registered by the CBI, ACB, Bengaluru, against ALPL, its Directors, and others under various sections of the IPC and the Prevention of Corruption (Amendment) Act, 1988.

The ED probe revealed that funds were diverted to entities in Panama and Costa Rica, which are controlled by relatives of one of the Directors of ALPL, as an advance payment for the import of timber.

Through such criminal activities, the accused persons generated and acquired POC in crores of rupees. Properties worth Rs 4 crore have been attached vide Provisional Attachment Order dated September 11. Earlier in 2024, ED had also attached immovable properties held by the Directors of ALPL worth Rs 43 crore, leading to cumulative attachment of Rs 47 crore in the case, the ED stated.

ED investigation further revealed that the company Associate Lumbers Pvt Ltd, represented by its directors, Mohamed Farouk Suleman Darvesh, Manoharlal Satramdas Agicha, Srichand Satramdas Agicha, Ebrahim Suleman Darvesh entered into criminal conspiracy by siphoning off the loan amount sanctioned by the Union Bank of India (erstwhile Corporation Bank) to either the sister concerns of ALPL in form of unsecured loans or to other firms for purchase of property in the name of ALPL and Touchwood Real Estate Private Ltd. etc., thereby causing loss to the Union Bank of India to the tune of Rs 56 crore as on date of NPA and total loss to the Bank is Rs 122 crore including interest as on date of complaint filed by the Bank.

ED investigation has also revealed that ALPL had made numerous 'accommodative entries without any genuine business relationship with its sister concerns solely to enhance its drawing power (DP) by inflating its turnover. Consequently, ALPL obtained renewed credit facilities of Rs 60 crore from the complainant bank, according to the ED.

Therefore, it is concluded that ALPL and its sister concerns engaged in accommodative entries that facilitated the renewal of credit facilities of ALPL based on inflated turnover and also facilitated the diversion of loan proceeds to sister concerns.

Further, funds were also diverted for the purchase of immovable properties and settlement of loans of sister concerns/OTS with banks on behalf of sister concerns, and revenue from the sale of stocks was not routed through the loan account. Also, stock worth Rs 7 crore was disposed of by the Directors and claimed as washed away in the Chennai floods, the ED stated.

Further investigation is in progress.

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