Bank fraud: ED files charge sheet against Vadodara-based firm in Rs 2,600-cr fraud

The agency said in a statement that it has filed the charge sheet or the prosecution complaint against the firm Diamond Power Infrastructure Ltd (DPIL) and 14 others, including its directors and executives Amit Bhatnagar, Sumit Bhatnagar and Suresh Bhatnagar, before the special Prevention of Money Laundering Act (PMLA) court of A C Joshi here.

"In the prosecution complaint, a prayer has been made under section 4 of the PMLA for confiscation of  attached assets as well punishment for directors of DIPL, its directors and other accused persons involved in the case," the Enforcement Directorate (ED) said.

The agency, in April this year, had attached assets worth over Rs 1,122 crore, including wind mills and an under-construction hotel, of the company.

DPIL is accused of cheating various banks to the tune of Rs 2,654 crore. The central probe agency had filed a criminal case against the firm and its promoters under the PMLA after taking cognisance of a CBI FIR.

The Bhatnagar trio were arrested by the Central Bureau of Investigation (CBI) in April. While Suresh was granted bail recently, his two sons -- Amit and Sumit -- are still lodged at the Sabarmati central prison here.

The agency had said the company, DPIL, through its related entities, was able to gain funds "fraudulently" to the tune of Rs 261 crore by twisting and manipulating the facility of Letter of Credit (LC) from the banks.

"When the banks conducted stock audits of DPIL it was found that a large part of the stock of goods was missing from their premises. The total of such missing stock during 2008-2018 is about Rs. 453.54 crore," the ED said.

DPIL diverted Rs 5.80 crore to UAE-based Diamond Power Global Holding Ltd., and about Rs 44 crore to group company Northway Spaces Ltd, it said.

The agency alleged in the charge sheet that "DPIL also diverted about USD 40,32,000 (approx Rs 21 crore) to group company Mayfair Leisures Ltd through a series of UAE-based firms."

DPIL also showed excess sales of about Rs 270 crore and false trade receivables to the tune of Rs 384 crore, it alleged.

The agency had earlier said the promoters through a web of companies and cross holdings were found to be the "main decision makers", controllers and thus, the beneficial owners of the company and all the related companies.

"Therefore, it appears there was little genuine business activity done by the Diamond group of companies and most of the business shown on records was from such fictitious transactions and this has resulted into default of Rs 2654.40 crore to banks," the ED had said.  The ED, which said the probe in the case is still under progress, had taken up the case to investigate if the alleged defaulted loans were laundered to create illegal assets and black money by the accused.

The CBI had said DPIL, which manufactures electric cables and equipment, is promoted by S N Bhatnagar and his sons Amit Bhatnagar and Sumit Bhatnagar, who were also the executives of the firm.

The loan amount of Rs 2,654 crore of the firm was declared a non-performing asset in 2016-17.