ED Attaches Properties in Bank Fraud Case of Transitory India

Hyderabad: The Enforcement Directorate ED Attaches Properties in Bank Fraud Case has made a significant move in the ongoing investigation of a colossal bank fraud case involving Transitory India Ltd. (TIL). Properties worth Rs. 48.71 crore have been provisionally attached by the ED’s Hyderabad unit under the Prevention of Money Laundering Act (PMLA), 2002. This action marks another step in the agency’s relentless efforts to combat financial irregularities in the country.

ED Attaches Properties in Bank Fraud Case Overview of the Case

The bank fraud case under scrutiny involves a staggering loan fraud amounting to Rs. 7,926 crore, one of the largest in India’s financial history. Transitory India Ltd., a company owned by former MP and senior Telugu Desam Party (TDP) leader Rayapati Sambasiva Rao, is at the center of the controversy.

The ED’s investigation uncovered that the company secured massive loans from Canara Bank and a consortium of 13 other banks between 2013 and 2014. The alleged irregularities in loan usage led to the accounts turning into non-performing assets (NPAs), causing substantial losses to the banking sector.

Key Findings

• Immovable Properties Attached:
  • The attached properties include land parcels and residential premises valued at Rs. 48.71 crore.
  • These assets are linked to the proceeds of the fraud.
• Search Operations:
  • In August last year, the ED conducted searches across nine locations, including Hyderabad and Guntur.
  • Premises associated with Rayapati Sambasiva Rao and other promoters were raided.
• Funds Diversion:
  • Borrowed funds were reportedly diverted to group companies, shell companies, and other entities.

Origins of the Investigation

The ED’s case under the PMLA originated from an FIR filed by the Central Bureau of Investigation (CBI) in 2020. The CBI’s Bengaluru unit had registered the FIR against:

• Transitory India Ltd. (TIL)
• CMD Cherukuri Sridhar
• Former MP Rayapati Sambasiva Rao
• Akkineni Satish and others

The charges include:

• Criminal conspiracy
• Cheating
• Forgery
• Falsification of documents
• Violations under the Prevention of Corruption Act

Consortium of Banks Affected

The fraudulent activities affected a consortium of banks, including:

• Canara Bank
• Central Bank of India
• Union Bank of India
• Corporation Bank
• Andhra Bank
• Allahabad Bank
• Bank of India
• United Bank of India
• UCO Bank
• Bank of Maharashtra
• South India Bank
• Dena Bank
• Vijaya Bank

Nature of the Fraud

The fraudulent activities involved multiple irregularities:

• Irregularities in Loan Usage:
  • Non-payment of interest on working capital limits.
  • Frequent devolvement of Letters of Credit (LCs).
  • Failure to route operations through consortium banks.
• Diversion of Funds:
  • Misuse of funds by transferring them to unrelated entities.

ED’s Persistent Efforts

The ED has been actively pursuing the case to ensure accountability and recover the proceeds of the crime. The recent attachment of properties underscores the agency’s commitment to tackling financial crimes and safeguarding the interests of financial institutions.

Conclusion

The attachment of properties worth Rs. 48.71 crore by the ED marks a crucial development in the fight against financial fraud. This case highlights the importance of stringent measures to prevent misuse of public funds and uphold the integrity of the banking system. The investigation is ongoing, and further actions are expected in this high-profile case.

• Image Caption: ED seizes properties worth Rs. 48.71 crore in Transitory India bank fraud case under the PMLA.