The Enforcement Directorate on Tuesday attached immovable properties worth Rs 1,122 crore in a Rs 2,654.40-crore bank fraud case against Vadodara-based Diamond Power Infrastructure (DPIL).
The Enforcement Directorate on Tuesday attached immovable properties worth Rs 1,122 crore in a Rs 2,654.40-crore bank fraud case against Vadodara-based Diamond Power Infrastructure (DPIL). Taking strong action, the ED attached properties of DPIL and its related companies such as Diamond Power Transformer, Diamond Projects, Mayfair Leisures and Northway Spaces. The properties include plant, machinery, building and land of DPIL and DPTL in Vadodara; three windmills in Bhuj; residential bungalows and flats of the Bhatnagar family, unsold flats of Northway Spaces, under-construction Hotel of Mayfair Leisures and other land parcels held by related companies of DPIL, all located in Vadodara.
The central agency has recorded case against DPIL and its founder Suresh Bhatnagar, his sons Amit Bhatnagar, managing director and Sumit Bhatnagar, joint managing director of the company, on the basis of an FIR filed by the Central Bureau of Investigation (CBI), ACB, Gandhinagar for defrauding banks and financial institutions of Rs 2,654.40 crore.
Investigation by ED has revealed that DPIL have indulged into circuitous transactions of huge amounts with various parties, including its related parties, by issuing fake invoices without any actual sale and purchase of goods.
The ED in a written statement said, “This was done with dual intention of availing CENVAT credit fraudulently as well as projecting increased turnover before the banks in their financial records. DPIL has shown fake/fictitious entries of receivables in their books of accounts of around Rs 1,000 crore from their debtors and on the basis of such books of account M.s DPIL is continuing to get credit from the banks.” On investigation, it was found that most of these figures are exaggerated. Further, DPIL through its related party was able to gain funds fraudulently to the tune of Rs 261 crore by twisting and manipulating the facility of letters of credit (LC) from the banks.
According to the ED, DPIL also diverted huge amount of funds received as loan/cash credit to its real estate companies such as Northway Spaces and Mayfair Leisures. “Bhatnagar family through its web of companies and cross holdings were found to be the main decision makers, controllers and thus the beneficial owners of DPIL and all the related companies. Therefore, it appears there was little genuine business activity done by the Diamond group of companies and most of the business shown on records was from such fictitious transactions and this has resulted into default of Rs 2654.40 crore to banks,” said the ED.