ED attaches Sowbhagya Ispat’s properties worth ₹26.86 crore in bank fraud case

The Directorate of Enforcement, Hyderabad Zonal Office, provisionally attached properties worth ₹26.86 crore belonging to M/s Sowbhagya Ispat India Pvt. Ltd. in connection with a bank fraud case.

The action was taken under the provisions of the Prevention of Money Laundering Act, 2002. The attached assets include flats, a residential house and open plots of land.

The investigation was initiated on the basis of a case registered by the Central Bureau of Investigation (CBI) against M/s Sowbhagya Ispat India Pvt. Ltd., its directors and others, for allegedly defrauding Andhra Bank, which has since merged with Union Bank of India, and causing loss to the bank.

According to the agency, the company had availed term loans and working capital facilities from the bank for establishing and expanding a steel manufacturing unit. During the investigation, it was found that the accused allegedly obtained enhanced credit facilities by submitting fabricated stock statements, inflated financial records, forged documents and false certificates.

Investigators said that the loan funds were diverted and siphoned off instead of being utilised for the sanctioned purposes. The funds were routed through related entities and accommodation entry providers, creating fictitious turnover and circular transactions to inflate the financial position of the company.

The probe further revealed that false and inflated stock statements were submitted and receivables were manipulated in order to artificially maintain drawing power and secure higher credit limits from the bank. By adopting these methods, the accused allegedly obtained and utilised bank loans, generating proceeds of crime amounting to ₹46.52 crore.

The bank has so far recovered ₹15.52 crore. Of the remaining proceeds of crime amounting to about ₹31 crore, properties valued at ₹26.86 crore were identified during the investigation and attached under the provisions of the Prevention of Money Laundering Act, 2002.

Further investigation is under progress in the case.