ED searches six premises in Chennai, Tirupur over Rs 116.79 crore IOB fraud

CHENNAI: The Directorate of Enforcement (ED), Chennai Zonal Office-II, conducted searches at six residential and office premises in Chennai and Tirupur on September 18 in connection with a money laundering investigation into an alleged bank fraud involving PGC Corporation Ltd and others.

The searches were conducted under the Prevention of Money Laundering Act (PMLA), 2002, based on an FIR registered by the CBI, EOB, Chennai. The case concerns an alleged fraud of about Rs 116.79 crore involving Indian Overseas Bank (IOB), according to the ED.

The ED said its investigation found that PGC Corporation had availed loan facilities from IOB, with the account classified as a non-performing asset (NPA) in 2013 and declared fraudulent in 2020.

According to the agency, the accused allegedly submitted falsified and manipulated financial statements for 2011-12 to obtain enhanced credit facilities. The loan funds were allegedly diverted to personal accounts and foreign entities, followed by round-tripping of funds.

The agency further alleged that D Prem and Aadith D Vikram, directors of the firm, created a network of domestic and foreign companies and firms and diverted loan funds to them as investments. Some of the funds remitted abroad in the guise of investments were allegedly brought back and used for business expenses in India.

The ED also said inventory belonging to PGC Corporation, valued at more than Rs 235 crore, was allegedly sold to related entities without actual receipt of sale proceeds after the bank initiated loan recovery. The related entities were subsequently allowed to close without lenders' approval.

During the searches, the ED said it found assets and properties held in the names of the spouses and relatives of Prem and Vikram. It also alleged that businesses had been established in the names of spouses and employees, while the two accused ultimately managed and controlled them.

The searches resulted in the seizure of unexplained cash of about Rs 82 lakh, two luxury vehicles, laptops, pen drives, mobile phones, property documents and other incriminating documents, the agency said. Further investigation is under way.