The Special Court under the Prevention of Money Laundering Act (PMLA) in Mumbai has ordered the restitution of immovable properties worth ₹393.79 crore to bona fide legitimate claimants in the money laundering case involving Nakoda Ltd and others.
ED's investigation, initiated by its Surat sub-zonal office under the PMLA, relates to allegations that Nakoda Ltd and others generated and laundered proceeds of crime by defrauding a consortium of 13 banks of about ₹828 crore.
According to ED, Nakoda Ltd was owned and controlled by Babulal Gumanmal Jain, Devendra Babulal Jain and others. The investigation found that funds were allegedly routed through group entities as part of the fraud.
The bank consortium, led by Canara Bank, had issued letters of credit (LCs) to vendors of Nakoda Ltd based on invoices submitted by them. ED said these LCs were subsequently discounted by the vendors using fake bills of exchange and invoices that had been accepted by Nakoda Ld despite there being no actual supply of goods.
The investigation found that 1,212 LCs totalling ₹4,204.25 crore had been opened in favour of vendors of Nakoda Ltd. Of these, 202 inland LCs amounting to ₹827.98 crore were allegedly devolved because the company failed to make the required payments.
During its PMLA investigation, ED provisionally attached immovable properties worth ₹375.71 crore in 2018. A further set of immovable properties valued at ₹18.08 crore was attached in 2019.
The two sets of attachments, together amounting to ₹393.79 crore, were subsequently confirmed by the adjudicating authority.
ED also filed a prosecution complaint and a supplementary prosecution complaint before the Special Court, PMLA, Mumbai, against Nakoda Ltd and other accused persons for alleged money laundering. The agency had sought confiscation of the attached properties as proceeds of crime.
Meanwhile, insolvency proceedings were initiated against Nakoda Ltd under the corporate insolvency resolution process (CIRP) before the Ahmedabad bench of the national company law tribunal (NCLT).
After the resolution process failed, liquidation proceedings were commenced against the company.
During the liquidation process, the liquidator approached the Special Court, PMLA, Mumbai, seeking restoration of the properties attached by ED.
ED said that, considering the objective of the PMLA to restitute or restore proceeds of crime to bona fide legitimate claimants, it submitted a no-objection to the release of the attached properties.
Based on ED's submission, the Special Court ordered the release of the attached immovable properties valued at ₹393.79 crore to the liquidator.
The properties will subsequently be handed over to bona fide legitimate claimants, according to ED.
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