ED attaches assets worth ₹53.59 Crore in a Bank Fraud case of Parekh Aluminex Ltd and others

The Directorate of Enforcement (ED), Mumbai Zone-I has provisionally attached immovable and movable properties worth ₹53.95 Crore under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in a money laundering case related to bank fraud committed by M/s Parekh Alumine​x Limited (PAL) and others.

ED investigation was initiated on the basis of FIR registered by CBI, EOW Mumbai and EOB Mumbai against M/s Parekh Alumine​x Limited, and others for offences under Sections 420 and 120-B IPC, 1860 and Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988.

Investigation has revealed that PAL fraudulently obtained loans from a consortium of banks by submitting inflated stock and debtor statements and loan accounts of PAL were declared NPA for an amount of Rs. 2,296/- Crore (approx.).

Investigation has revealed that J K Shah Group have assisted in the diversion of the POC amounting to Rs. 110.54 Crore through various entities and persons and also one of the beneficiaries of the Proceeds of Crime, having received and enjoyed ₹70.25 Crore (approx.), forming part of the total Proceeds of Crime of ₹2,296.58 Crore, which caused wrongful loss to a consortium of banks led by Indian Overseas Bank and sixteen other banks.

ED had already attached assets worth ₹493 Crore (approx.) in this case. Prosecution Complaint has also been filed before the Hon’ble Special Court (PMLA), Mumbai, which has taken cognizance of the offence.

Till date, ED has attached total assets of Rs. 546/- Crore (approx.) in this case involving wrongful loss to a consortium of banks led by Indian Overseas Bank and sixteen other banks. Further investigation is under progress.

As per the Indian Express Report, The alleged financial fraud by Parekh Aluminex Ltd was first unearthed in June 2013, when a due diligence audit by Deloitte Touche Tohmatsu India Pvt Ltd found “irregularities of serious nature” in the day-to-day affairs of the company. A financial audit of the company was ordered by a consortium of lenders, including State Bank of India (SBI), as part of its efforts to restructure the debt of the company. The debt of the firm stood at Rs 2,545 crore as on November 2015.

According to the report, 22 banks and financial institutions lent money to Parekh Aluminex Ltd. The list included Indian Overseas Bank, State Bank of India, Bank of Baroda, Union Bank of India, Punjab National Bank, Export-Import Bank of India (EXIM Bank), Axis Bank, Dena Bank, Central Bank of India, State Bank of Travancore, Allahabad Bank, Vijaya Bank, Kotak Mahindra Bank, Dhanlaxmi Bank, Canara Bank, Corporation Bank, South Indian Bank, UCO Bank, Federal Bank, IDBI Bank, ICICI Bank and Life Insurance Corporation of India (LIC).