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The Enforecement Direcorate has arrested Vuppalapati Satish Kumar, Managing Director of Prithvi Information Solutions Limited (PIS), under the Prevention of Money Laundering Act, 2002, for causing a loss of ₹3,316 crore to a consortium of public sector banks.
The act was allegedly carried out in connivance with his sister B Hima Bindu, MD of VMC Systems Ltd. The arrest was made on on August 12.
The ED had initiated investigation on the basis of an FIR filed by the CBI against VMC Systems, which had taken loans from a consortium of banks. The total outstanding is worth ₹3,316 crore, according to a ED statement.
Also read: High costs hit Prithvi Info profit
A forensic audit revealed that VMC Systems circulated loans to various related entities to inflate its books of accounts and had opened various Letters of Credit worth ₹692 crore in the name of fake/dummy entities, which were subsequently devolved.
‘Funds siphoned’
Satish Kumar, through his company Prithvi Information and Ennar Energy Ltd, and with the active assistance of Hima Bindu, in order to dodge the banks, created false/exaggerated operational revenues by generating fake sales/purchase invoices through the companies controlled by their family members. Both had siphoned off a part of proceeds of crime by remitting it to the overseas entities controlled by their family members. Although Satish Kumar claimed that he had no link with the NPA of VMC Systems, the forensic examination of digital devices (more than 40 hard disks of VMC Systems were recovered from his residence during the search carried out by ED on July 20, 2021), it was found that he indulged in benami transactions and was involved in efforts to transfer fraud amounts to off-shore entities, the statement said.
He was non-cooperative during the investigation and was arrested under the PML Act on August 12, 2021 and was produced before the PMLA Special Court. The High Court granted 10 days custody to ED. Earlier, V Hima Bindu was arrested under PMLA and was in ED custody till August 18.
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