ED freezes 139 bank accounts of Bengal-based corporate firm in money laundering case

Kolkata: The Enforcement Directorate (ED) on Saturday confirmed to have frozen 139 bank accounts of Gupta Power Infrastructure Limited (GPIL), a company registered with West Bengal, in connection with a money-laundering case in which the central agency had been investigating for some time.

According to a statement issued by the ED, the decision to freeze the bank accounts was taken after the officers of the agency's Kolkata-based eastern regional office conducted raids and search operations at nine locations in West Bengal and neighbouring Odisha on October 5 this year, which were linked to GPIL, its associated entities and persons connected with its management, in relation to an investigation into bank fraud committed by the West Bengal company.

The central agency claimed that following the raid and search operation, various incriminating documents, devices and records were found and seized, as per the provisions of Prevention of the Money Laundering Act (PMLA), 2002.

ED, the investigation arm of the Ministry of Finance, also claimed that besides 139 bank accounts related to GPIL, and a number of mutual funds and shares held in the name of the corporate entity and its associated individuals were also frozen.

In addition, the ED claimed, three high end cars (two Mercedes and one BMW) were also confiscated.

"The contents of the seized material and financial transactions are currently under investigation," the ED statement said.

The ED's investigation in the matter was initiated on the basis of an FIR registered by the Central Bureau of Investigation (CBI), where it was alleged that GPIL availed substantial fund-based and non-fund-based working-capital facilities from a consortium of banks, with Canara Bank as the lead bank.

The consortium exposure was around Rs 3,590 crore, including Canara Bank's sanctioned exposure of around Rs 1,174 crore.

However, as claimed by the ED, later GPIL allegedly manipulated its drawing power and borrowing capacity by substantially inflating the stock reported to banks vis-à-vis the stock reflected in its audited financial statements and including around Rs 280 crore worth of project and EPC stock as eligible stock for availing working capital facilities.

"Further, disputed and doubtful receivables, including claims rejected by the NCLT, were continued to be represented as eligible receivables, while a major discrepancy of around Rs 1115.15 crore was observed in the receivables reported by GPIL, indicating possible inflation of its current assets and consequent enhancement of borrowing limits," the ED statement said.

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