Enforcement Directorate seized Rs.170 Crore Assets Linked to Former Mandhana Industries Chief

On Thursday, the Enforcement Directorate (ED) took significant steps to address alleged financial misconduct by Purushottam Chhaganlal Mandhana, the former Chairman and Managing Director of Mandhana Industries Limited (MIL), which is now known as GB Global Ltd. Under the Prevention of Money Laundering Act (PMLA) of 2002, the ED provisionally attached properties worth ₹170 crore belonging to Mandhana and others involved in this case.

What Properties Were Attached?

The attached assets include both immovable and movable properties:

1. Immovable Properties:

• Residential flats
• Commercial offices
• Locations include major cities such as Mumbai, Thane, Raigad, and Bengaluru.

2. Movable Properties:

• Bank balances totaling ₹55 lakh.
• Gold and diamond jewelry valued at ₹41 lakh.
• Shares and securities, including corporate bonds worth ₹13 crore.
• Three luxury cars, collectively valued at ₹84.5 lakh.
• A collection of expensive watches estimated at ₹70 lakh.

Background of the Case

The investigation began after the Central Bureau of Investigation (CBI) registered a First Information Report (FIR) against Mandhana Industries and several individuals, including Purushottam Mandhana, Manish Mandhana, and Biharilal Mandhana. This action was prompted by a complaint from Bank of Baroda, which accused the Mandhana group of defrauding a consortium of banks to the tune of ₹975.08 crore.

Allegations Against Mandhana Industries

The allegations suggest that Mandhana Industries and its directors colluded to cause significant financial losses to the banks while unfairly benefiting themselves. They are accused of misusing loan funds through fraudulent transactions and circular trading.

One of the central allegations against Purushottam Mandhana is that he created numerous fake companies using the names of his employees. This allowed him to obscure the true nature of the company’s financial activities and manipulate funds, including loan proceeds. Through these fictitious entities, he allegedly orchestrated fake sales and purchases to deceive the banks.

Investigation Findings

The ED’s investigation unveiled a complex web of financial activities designed to hide the “proceeds of crime.” This involved moving money through various bank accounts linked to fictitious sister companies of MIL and personal accounts belonging to the Mandhana family.

A significant portion of the illicitly obtained funds was reportedly used by the Mandhana family to pay off personal debts, invest in the stock market, and acquire properties and jewelry.

Furthermore, the investigation revealed that shares of Mandhana Industries Limited were manipulated through the trading and Demat accounts of various fictitious companies. This manipulation was aimed at artificially inflating share prices and misleading both banks and shareholders about the company’s true financial status.

Conclusion

The actions taken by the ED highlight the ongoing efforts to combat financial fraud and ensure accountability in corporate governance. As this case unfolds, it will serve as a reminder of the importance of ethical business practices and the potential consequences of financial misconduct. The CBI has yet to file a chargesheet in this case, and further developments are anticipated.