The Enforcement Directorate has registered a case of money laundering in connection with an alleged Rs 621-crore loan fraud involving UCO Bank, officials said today.
The agency has filed a criminal complaint under the Prevention of Money Laundering Act (PMLA) after taking cognisance of a CBI FIR registered last month.
The CBI booked a former chairman and managing director (CMD) of UCO Bank, Arun Kaul, and others in the case. Besides the bank CMD, the CBI booked realty firm Era Infra Engineering India Ltd., its CMD Hem Singh Bharana, two chartered accountants, and Pawan Bansal of Altius Finserve Pvt. Ltd. among others.
The ED will probe if the alleged defrauded bank loans were used to create tainted assets by way of money laundering.
The CBI alleged that the accused persons in pursuance of a criminal conspiracy had defrauded UCO Bank to the tune of about Rs 621 crore by diversion and siphoning off the bank loans, they said.
According to the CBI, Arun Kaul, who was the CMD of a Kolkata-based bank between 2010 and 2015, allegedly facilitated the accused company in obtaining the loans.
The loan was not utilised for the sanctioned purpose, the CBI alleged.
The ED will also work to identify assets of the accused so that they can be attached, if required, during the course of investigation, they said.
In its complaint, the bank alleged that two loans were issued to the company in 2010 - Rs 200 crore in March and Rs 450 crore in October.
The Rs 200-crore loan was issued for repayment of high cost debt to Central Bank of India, Punjab National Bank and IFCI. It was found that the company did not utilise the amount for the purpose for which it was disbursed and diverted the funds.
No amount was used to repay the dues of Central Bank of India and Punjab National Bank, while only Rs 59 lakh was repaid towards dues of IFCI, according to the CBI FIR, now used by the ED.
The chartered accountant (CA) in this case -- Pankaj Jain -- dishonestly and fraudulently did not mention the details of utilisation of term loan in the end-use certificate, the CBI alleged.
In the case of the Rs 450-crore loan, too, the funds were utilised for purposes other than stipulated in the sanction and the end-use certificates given by the CA were intentionally ambiguous and against the fact, it alleged.
"The account was declared NPA as on July 7, 2013 by the bank and the present balance as on December 31, 2017 is Rs 737.88 crore," the CBI FIR alleged.
Both the CBI and the ED, the two central agencies, are investigating a number of such bank fraud cases under the respective laws they enforce.