The directorate of enforcement (ED) has provisionally attached two high-value immovable properties, including the iconic Hotel Rangsharda in Bandra and a land parcel in Prabhadevi, collectively valued at about ₹332.24 crore, in connection with a money laundering investigation against Prabhudas Virchand Lotia and others.
The money laundering investigation stems from a first information report (FIR) registered by Bandra police on a complaint filed by the trustees of Rang Sharda Pratishthan. The complaint alleged offences of cheating and criminal breach of trust by Prabhudas Lotia and Rang Sharda Hotels in relation to a land parcel allotted by the Maharashtra Housing and Area Development Authority (MHADA) to the trust at a concessional rate.
According to ED, the land had been allotted exclusively for the promotion of Marathi theatre, literature and cultural activities.
The agency said its investigation revealed that Mr Lotia, acting through Rang Sharda Hotels, allegedly wrongfully appropriated and exercised control over the land allotted to the trust and commercially exploited it in violation of the conditions of allotment and the applicable regulatory approvals.
ED alleged that instead of complying with the terms of the allotment, the company failed to hand over the drama theatre and artists' accommodation to Rang Sharda Pratishthan as mandated.
Instead, the property was allegedly used for commercial purposes, including operating a hotel, lodging house, restaurant, liquor bar, banquet facilities and other commercial establishments without obtaining the requisite statutory approvals.
According to the investigation, Rang Sharda Hotels also caused the unauthorised sale of commercial premises constructed on the trust land.
ED alleged that the proceeds generated from these sales were subsequently used to acquire another property at Prabhadevi in Mumbai which has also been attached under the provisional attachment order.
The agency said it has identified proceeds of crime amounting to about ₹512 crore during its investigation.
The amount includes revenues allegedly generated through hotel operations, lodging facilities, restaurants, liquor bar, banquet services, rental income and other commercial activities carried out on the property, it added.
Further investigation into the case is continuing, the agency said.
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