Rs 27000 crore Bank Loan Fraud: Indian authorities have seized properties worth more than Rs 5,000 crore in a major crackdown on an alleged bank loan fraud involving the Amtek Group, an automotive equipment manufacturer that is now insolvent. The Enforcement Directorate (ED) announced this action under the anti-money laundering law on Saturday, September 7. Click here to join our whatsapp channel to receive banking news updates.
Background of the Case
The case began when IDBI Bank and Bank of Maharashtra filed complaints with the Central Bureau of Investigation (CBI), accusing the Amtek Group of illegally diverting bank loans and causing huge losses to the lenders. According to the ED, the total fraud is estimated to be around Rs 27,000 crore.
Several companies under the Amtek Group, including Amtek Auto Limited, ARG Limited, ACIL Limited, Metalyst Forging Limited, and Castex Technologies Limited, went bankrupt, resulting in what the banks called an “80 percent haircut.” This means that banks were forced to accept just a small fraction of the amount they were owed, leading to significant financial losses for public sector banks.
How Rs 27000 crore Bank Loan Fraud Unfolded?
Investigations revealed that the Amtek Group had manipulated its financial statements to secure fraudulent loans. They created fake assets and investments to mislead banks. In June, the ED conducted searches that uncovered a web of over 500 shell companies used by the group to hide and invest in high-value real estate and luxury properties. These companies were structured in such a way that it was extremely difficult to trace the real owners, allowing the group to conceal the true ownership of these assets.
According to the ED, these shell companies held assets whose real ownership was linked to the group’s promoter, Dham, who was actively transferring or selling these properties to hide their true ownership.
Legal Action and Seizure of Assets
The ED filed a case against the Amtek Group and its promoters under the Prevention of Money Laundering Act (PMLA). This case was based on an FIR filed by the CBI and a directive issued by the Supreme Court in February.
Under the PMLA, the ED provisionally attached 85 immovable properties valued at Rs 2,674.75 crore. These properties include commercial buildings and farmhouses in Delhi, 200 hectares of land in Maharashtra, and hundreds of acres in Haryana and Punjab, including prime areas in Gurugram, Chandigarh, Rewari, and Panchkula.
In addition to real estate, the attached assets also include shares worth Rs 2,353.46 crore in listed and unlisted companies like Alliance Integrated Metaliks Limited, Newtime Infrastructure Limited, Rollatainers Limited, and Barista Coffee Company Limited. Debentures worth Rs 87.10 crore were also seized. The total value of all the attached properties stands at Rs 5,115.31 crore, according to the ED.
Conclusion
This action by the ED highlights the serious consequences of fraudulent financial activities and serves as a reminder that authorities are cracking down on financial misconduct. The seizure of these assets is a significant step towards recovering the losses suffered by the banks and holding the culprits accountable for their actions.
Fake High profile have now started looting without fear
From the news we could gather banks have no fool proof system to ascertain the authenticity of business house conience couldn’t be ruled out.
Saci all concerned and register case against. Official too mm
It may be noted that all financial statements of a company is scrutinized by reputed chartered accountants. If they are also hand in glove with such fraudulent companies, difficult for banks to track it. Chartered accountants have no accountability. They should also be made to pay.