The Directorate of Enforcement (ED) has attached immovable properties of the Saravana Stores (Gold Palace) in Chennai, amounting to ₹234.75 crore, in relation to a money laundering case for defrauding the Indian Bank. It has initiated an investigation based on the FIR registered in April by the CBI, EOW, Chennai.

The ED recorded the case in May under the provisions of the Prevention of Money Laundering Act (PMLA). It was alleged that the late Pallakudurai, P Sujatha and YP Shiravan, partners of Saravana Stores (Gold Palace) with the criminal intention to cheat Indian Bank, T Nagar Branch, Chennai, had conspired with unknown public servants and unknown others, says a release from ED.

Investigation revealed that Saravana Store (Gold Palace) Chennai had applied for sanctioning of loan by fabricating balance sheet and projecting sound financial health of the firm. There is a huge mismatch between the sales reported and credit entries of the firm. The said firm has presented a cosmetic picture of expected turnover for upcoming financial years at the time of availing loan.

Further, in order to cheat Indian Bank, the firm in collusion with property valuer, bank officials, and certain private persons proposed to purchase assets at a price which is clearly much higher than the real fair market value.

The investigation conducted by the ED has adequately established the ill motives of accused individuals and bank officials from the inception.

Investigation revealed that the accused persons overstated the inventory, transferred the assets without the knowledge of the bank, used the OCC limits to repay the term loan, misappropriated and diverted the funds for which it was not sanctioned, and committed other irregularities and thereby, the said accused persons and firms cheated the bank and caused wrongful loss to the bank and corresponding wrongful gain to themselves. The accused company has generated proceeds of the crime amounting to ₹240 crore out of criminal activities.

Further investigation is in progress, the release said.

S Martin & Others case

The ED also provisionally attached movable and immovable properties worth ₹173.48 crores under provisions of PMLA in the case against S Martin & Others.

Attached properties consist of various movable and immovable properties in the form of bank accounts and lands situated in Tamil Nadu, under his name as well as in the name of his various companies, the release said.

Related Topics