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ED attaches Rs 117 crore assets of Prakash Industries

The Enforcement Directorate (ED) has attached movable and immovable properties worth Rs 117 crore of New Delhi-based steel manufacturer Prakash Industries.

twitter-logo Dipak Mondal        Last Updated: December 6, 2018  | 19:39 IST
ED attaches Rs 117 crore assets of Prakash Industries

The Enforcement Directorate (ED) has attached movable and immovable properties worth Rs 117 crore of New Delhi-based steel manufacturer Prakash Industries.

According to ED, an investigation by the enforcement agency into a case of misrepresentation of assets and net worth by Prakash Industries to get a coal block allocated has also revealed that the New Delhi-based company had filed a false declaration with the Bombay Stock Exchange (BSE) on 17 November 2007 that it has been allocated the coal block.

The coal block was actually allocated in February 2018 jointly to Prakash Industries and SKS Ispat Power Ltd.

The ED investigation revealed that as a result of the false 'filing', share prices of Prakash Industries jumped 10 times from Rs 31 on 2 April 2007 to Rs 351 on 4 January 2008. The investigation further revealed that to take advantage of the 'artificially created rise in the share value', the company issued 62,50,000 preferential shares on a premium of Rs 180 per share and sold these shares to five companies making a gain of 118.75 crores.

"The amount of Rs 118.75 crores, which was generated as a result of the schedule offence as committed on the date of filing of application for allocation of coal block by giving false net worth details and further false declaration to BSE, is the proceeds of crime, which are liable to be provisionally attached under PMLA," says a media statement by Enforcement Directorate.

Accordingly, the ED found that the aforesaid proceeds of crime had been generated and used in the continuous expansion related to manufacturing activities, therefore the value of Rs 117.09 crores was attached in the form of movable and immovable properties of the company under the provisions of PMLA.

The Central Bureau of Investigation (CBI) had earlier registered a case against Prakash Industries Ltd, alleging it applied for allocation of Coal Block in January 2007 on the back of false net-worth claims and on the basis of such misrepresentation, the company got allocated Fatehpur Coal Block on February 2008, which was later de-allocated in 2014.

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