Rs 220 Crore Bank Fraud: ED Seizes Assets in Mumbai and Dehradun in Ongoing Investigation
The Enforcement Directorate (ED) seizes assets worth Rs 79.78 crore in a Rs 220 crore bank fraud case involving Sharon Bio Medicine Limited. The assets are located in Mumbai, Navi Mumbai, Satara, Raigad, Dehradun, and more.
New Delhi: In a major development in the investigation of a Rs 220 crore bank fraud case, the Enforcement Directorate (ED) has seized immovable assets worth Rs 79.78 crore from Sharon Biomedicine Limited and related entities.
The assets, which include flats, plots, hotels, and agricultural land, are located in several areas including Navi Mumbai, Mumbai, Satara, Raigad in Maharashtra, as well as Dehradun, Haridwar, and Pauri Garhwal in Uttarakhand.
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This recent attachment of assets on January 24 is part of the ongoing probe into the financial misconduct of Sharon Bio Medicine Limited (SBML). The ED has confirmed that the total value of assets seized in this case has now risen to Rs 96.20 crore.
Background of the Fraud
The ongoing investigation, initiated under the Prevention of Money Laundering Act (PMLA), 2002, is related to a case registered by the Central Bureau of Investigation (CBI) and the Anti Corruption Bureau (ACB) Mumbai.
The probe centers around a massive bank fraud involving Sharon Biomedicine Limited, which allegedly caused a financial loss of Rs 220 crore to several banks through the use of forged documents and bogus contracts.
The ED’s investigation revealed that the pharmaceutical company, which manufactures active pharmaceutical ingredients, engaged in fraudulent activities to avail credit facilities from banks under false pretenses.
The company used fake contracts and forged documents to secure loans, which were then laundered through a web of shell companies, siphoning off the funds for personal gains.
ED’s Latest Actions and Seizures
In October 2024, the ED conducted raids on Sharon Bio Medicine Limited, which led to the seizure or freezing of movable assets worth Rs 14.53 crore, including bank funds, Demat accounts, and various incriminating documents.
The ED also seized digital devices and property-related documents, which have played a crucial role in building the case against the company.
The investigation has unearthed a complex network of shell companies that SBML allegedly used to inflate its turnover by fabricating sales and purchases.
These bogus transactions were then presented to the banks to enhance the company’s credit facilities. Once the loans were granted, the funds were diverted to create assets through multiple layers of shell entities linked to employees and relatives of key individuals in SBML.
The Impact of the Fraud on the Banking System
The Rs 220 crore bank fraud case underscores the vulnerabilities in the banking and financial systems, highlighting the potential for fraudulent activities to exploit loopholes in the system.
Through the use of forged documents, fake contracts, and shell companies, SBML was able to manipulate the banking process, securing loans under false pretenses.
The ED’s ongoing investigation is crucial in bringing the perpetrators to justice and ensuring that such fraudulent activities are prevented in the future.
The recovery of the seized assets will aid in the restitution of some of the stolen funds, and further legal action is expected as the investigation continues.
Also Read | ED Conducts Searches in Money Laundering Probe Against Former Rajasthan MLA
Key Takeaways from the ED’s Investigation
- Immovable Assets Seized: Flats, plots, hotels, and agricultural land worth Rs 79.78 crore were seized, marking a significant step in the ongoing investigation.
- Use of Shell Companies: Sharon Bio Medicine Limited allegedly created shell companies to siphon off funds through bogus sales and purchases, inflating their financial figures.
- Fraudulent Activities in the Pharmaceutical Sector: The case highlights how fraudulent activities can occur in even highly regulated sectors like pharmaceuticals, where forged documents and bogus contracts are used to deceive banks.
- ED’s Role in Asset Recovery: The Enforcement Directorate’s actions have resulted in the provisional attachment of significant assets, contributing to the ongoing fight against money laundering and financial fraud.
- Continued Legal Action: The ED and CBI continue their investigation, with more raids and seizures expected as the case progresses. Legal proceedings are expected to bring the perpetrators to justice.
