The Enforcement Directorate has attached Deccan Chronicle Holdings Limited (DCHL) assets worth Rs 263.10 crore in a bank loan fraud case under the provisions of the Prevention of Money Laundering Act.
The properties include movable and immovable assets, shares, bank balance, foreign currency receivables and luxurious cars.
The bank loan fraud caused a loss of Rs 1,161.93 crore to 6 public sector banks -- Canara Bank, Andhra Bank, Indian Overseas Bank, Central Bank of India, Corporation Bank and IDBI Bank.
The case was initiated following FIR registered by CBI for criminal conspiracy and other provisions for for causing wrongful loss of Rs 357.77 crore to Canara Bank.
The CBI registered five more FIRs relating to five PSU Banks and filed 6 charge sheets for causing wrongful loss of Rs 1,161.93 crore.
Various movable and immovable properties worth Rs 263.10 crore were attached. These properties are other than the properties pledged to banks by DCHL.
DCHL had availed loans for working capital, purchase of capital goods and short term loans by overstating the receivables, under-stating huge loan liabilities by furnishing fabricated financial statements and not disclosing the loans.
In all it availed 111 loans amounting to Rs 10,000 crore from 16 different banks during 2004 to 2012.
Of this, Rs 2,800 crore is outstanding to various banks as on September 2012 excluding interest.
These loans were used for other than the specified purposes, investing in 20 group companies and firms, acquiring companies with huge premiums, payments to Airbus towards purchase of cargo aircraft and payments to BCCI for Indian Premier League franchisee of ‘Deccan Chargers.’
In addition, payments made towards dividends declared by DCHL, buy-back of shares, issue of bonus shares, purchase of luxurious cars in the name of associates/group companies, repayment of earlier loans taken, etc.
The DCHL group companies acquired properties from these funds and did not disclose in the balance sheet to obscure the identity of such properties. This is nothing but money laundering, the ED stated.
Funds used for purchase of retail franchisee ‘Odyssey’ were received back by the promoters at a later date.
To present a rosy picture, DCHL declared dividends, issued bonus shares, bought-back shares by investing Rs 230 crore and the promoters of DCHL received Rs 143 crore as dividends.