Bank fraud: ED conducts raids in Tamil Nadu

New Delhi: The Enforcement Directorate (ED) on Saturday conducted searches at nine locations in Tamil Nadu in connection with an alleged Rs 90 crore bank loan fraud money laundering case.

Sources said searches were conducted at Virudhunagar, Madurai and Coimbatore in connection with the agency’s probe involving Ms Inshumathi Refineries Pvt Ltd (IRPL). Searches were conducted immediately after registering a criminal case under the Prevention of Money Laundering Act (PMLA).

Sources further said, “The firm is managed by R Shenbagan and others. Residential and business premises linked to him were also raided by the agency sleuths. Several incriminating documents were recovered during searches”.  IRPL was enjoying cash credit facilities, Letter of Credit (LOC) facilities and term loan from State Bank of India’s overseas branch in Chennai, sources said.

“It had availed a total of 46 LOCs from the SBI which were allegedly issued against bogus firms/fake invoices for a value of around Rs 87.36 crore which was devolved on the bank later due to insufficient funds in their account and also diverted the  business proceeds which resulted into a pecuniary loss of around Rs 90 crore to SBI,” said the central probe agency in its complaint, equivalent to an FIR. The ED has filed its PMLA case against the firm based on a CBI FIR and charge sheet against R Shenbagan and others. The ED sleuths are also in touch with CBI officials in connection with the case, sources said adding that if required the former may seek certain documents from the latter, they added.