The Enforcement Directorate (ED) has arrested Purushottam Chhaganlal Mandhana, former Chairman and Managing Director (CMD) of Mandhana Industries Limited, a now-insolvent Mumbai-based company, in connection with a money laundering case tied to an alleged bank loan fraud exceeding Rs 975 crore.
Purushottam Mandhana was apprehended on Thursday and subsequently presented before a special Prevention of Money Laundering Act (PMLA) court on Friday, which placed him in ED custody for six days.
The ED’s investigation stemmed from an FIR lodged by the Bank Frauds and Securities branch (BSFB) of the Central Bureau of Investigation (CBI) against Purushottam Mandhana, Manish Mandhana, Biharilal Mandhana, and others. The complaint, filed by the Bank of Baroda, accused them of defrauding a consortium of banks to the tune of Rs 975.08 crore.
According to the ED, Mandhana Industries Limited and its directors orchestrated a criminal conspiracy to defraud banks and secure wrongful gains by diverting loan funds through fraudulent transactions and circular trading. The CBI has not yet filed a chargesheet in the case.
The ED alleged that Purushottam Mandhana created numerous fictitious entities in the names of his employees to layer funds from Mandhana Industries Limited, including loan funds. These entities were allegedly used for bogus sales and purchases. Funds were also diverted from the company’s accounts to settle Mandhana’s personal debts and those of his family members.
In a bid to gather evidence, the ED conducted multiple search operations on June 26 and July 5. These operations uncovered crucial incriminating documents, including numerous property documents and several digital devices. Additionally, gold jewelry worth around Rs 3 crore, luxury cars such as Lexus and Mercedes-Benz, and multiple expensive watches, including Rolex and Hublot, were seized and frozen.
This arrest marks a significant step in the ED’s ongoing efforts to combat financial fraud and money laundering in India. The investigation continues as authorities work to uncover the full extent of the fraudulent activities and recover the misappropriated funds.
