The Directorate of Enforcement (ED) has completed the restitution of properties worth Rs 63.05 crore to the State Bank of India (SBI) and the UCO Bank under the provisions of the Prevention of Money Laundering Act (PMLA). The properties have restored to the SBI worth Rs 62.30 crore and UCO Bank Bank worth Rs 75 lakh. The agency attached the properties in the bank fraud investigation against M/s G.S. Oils Ltd and others.
The ED initiated probe in 2016 based on cases registered by the Central Bureau of Investigation (CBI) on the basis of complaints filed by SBI and UCO Bank against M/s G.S. Oils Limited and others accusing them for non-repayment of loans. The company had availed various credit facilities from the SBI and UCO Bank.
The ED investigation revealed that all such credit facilities turned for getting loans sanctioned which became non-performing assets on account of the fraud committed by the accused persons, causing wrongful loss to SBI to the tune of Rs 274 crore and to UCO Bank to the tune of Rs 32.33 crore.
Deciphering the Fraud
“Loans were round tripped & parked into various associate companies and subsequently either withdrawn in cash or utilized for purchasing land in the name of associate companies, which were again mortgaged for more loans,” the ED said. The investigation also revealed that large amounts of banks funds were diverted by fraudulently issuing Letters of Credit (LCs) to related shell firms for bogus supply of material, the ED said.
Court-Ordered Restitution
According to the agency, the restoration of attached assets completed after the Special PMLA Court, Nampally, Hyderabad, allowed the restitution petitions filed by the SBI and UCO Bank. The attached assets include agricultural and industrial lands located in the districts of Adilabad, Asifabad and Mancherial in Telangana, and in Maharashtra’s Wani.