In the Rs 2,654-crore bank fraud case against the Bhatnagars of Vadodara-based Diamond Power Infrastructure Ltd (DPIL), the Central agency, Directorate of Enforcement (ED), on Tuesday said it has attached immovable properties worth Rs 1,122 crore.
The ED had recorded a case of money laundering against Diamond Power Infrastructure Pvt. Ltd., Vadodara, Suresh Bhatnagar, founder of the company, and his sons Amit Bhatnagar, Managing Director and Sumit Bhatnagar, Joint Managing Director of the company.
The crackdown came on the basis of an FIR filed by the Central Bureau of Investigation (CBI), ACB, Gandhinagar for defrauding banks and financial institutions of Rs 2,654.40 crore. Acting tough, the ED attached properties of DPIL and its related companies such as Diamond Power Transformer Ltd, Diamond Projects Ltd, Mayfair Leisures and Northway Spaces.
Even as further investigations were underway, the ED attached properties including plant, machinery, buildings and land of DPIL and DPTL in Vadodara, three windmills in Bhuj, residential bungalows/ flats of the Bhatnagar family, unsold flats of Northway Spaces, an under-construction hotel of Mayfair Leisures and other land parcels held by related companies of DPIL, all located in Vadodara.
In a statement on Tuesday, ED said investigations had revealed that DPIL had indulged in circuitous transactions of huge amounts with various parties, including its related parties, by issuing fake invoices without any actual sale/ purchase of goods. "This was done with the dual intention of availing of CENVAT credit fraudulently, as well as projecting increased turnover before the banks in their financial records.
DPIL has shown fake/ fictitious entries of receivables in their books of accounts of around Rs 1,000 crore from their debtors and on the basis of such books of account DPIL is continuing to get credit from the banks," the statement said. It was further found that most of these figures were exaggerated. "Further, DPIL, through its related party, was able to gain fraudulently funds to the tune of Rs 261 crore by twisting and manipulating the facility of Letter of Credit (LC) from the banks. DPIL also diverted huge amount of funds received as loan/ cash credit to its real estate companies such as Northway Spaces and Mayfair Leisures," the ED statement said.
It was found that the Bhatnagar family, through its web of companies and cross-holdings, were found to be the main decision-makers, controllers and, thus, the beneficial owners of DPIL and all the related companies. ED found little genuine business activity done by the Diamond group of companies and most of the business shown on the records was from such fictitious transactions "and this has resulted in default of Rs 2,654.40 crore to banks."