The directorate of enforcement (ED) has provisionally attached movable assets worth ₹43.65 crore belonging to Electrotherm (India) Ltd and its promoters in a money laundering case linked to alleged diversion and siphoning of bank loans. The
attachment was made last week by ED's Ahmedabad zonal office under the Prevention of Money Laundering Act (PMLA), 2002.
The attached assets include ₹25.08 crore lying in two bank accounts of Electrotherm India with Yes Bank and 1,357,775 shares of the company held by its promoters, valued at ₹18.57 crore.
The ED case stems from a first information report (FIR) registered by the central bureau of investigation's bank securities and fraud branch (BS&FB) in Mumbai, following a complaint by Bank of India. The FIR was registered against Electrotherm India and its directors under various provisions of the IPC and the Prevention of Corruption Act.
According to ED, the investigation concerns credit facilities availed by Electrotherm India from Bank of India between 2007 and 2013. The agency alleges that funds obtained from the Bank were diverted and siphoned off instead of being used for the purposes for which the loans had been sanctioned.
Bank of India's outstanding dues from Electrotherm stood at ₹631.97 crore. The account was subsequently assigned to Edelweiss ARC for ₹550 crore, resulting in a loss of ₹81.97 crore to the bank, ED said.
ED's investigation has found that loans disbursed by Bank of India to Electrotherm for expansion were allegedly diverted soon after disbursement to repay existing liabilities, contrary to the sanctioned purpose of the facilities.
The agency further alleged that Electrotherm transferred funds to several entities from which the money was withdrawn in cash in lump-sum amounts shortly after receipt.
In some cases, the funds were allegedly routed through other entities before being withdrawn, indicating transaction layering, according to ED.
The agency said cash withdrawals running into crores of rupees were made from Electrotherm's bank accounts during the period from 2007 to 2013.
The seizure and freezing action was subsequently confirmed by the adjudicating authority under the PMLA, the agency said.
With the latest attachment of ₹43.65 crore, the total value of assets seized, frozen or attached in the case has reached ₹81.97 crore.
Further investigation in the case is continuing, ED said.
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