Ahmedabad, Oct 6 (SocialNews.XYZ) The Enforcement Directorate (ED) has frozen 215 bank accounts and seized Rs 20 lakh in cash following searches at 12 locations in Mumbai and Ahmedabad in a money laundering investigation linked to alleged bank fraud by companies of the Tayal Group and alleged misuse of insolvency proceedings.
The searches were conducted on September 30 by the ED's Kolkata Zonal Office-II under the Prevention of Money Laundering Act (PMLA), 2002, against Tayal Group promoters/directors Pravin Tayal, Saurabh Tayal and others, besides certain Resolution Professionals (RPs).
According to the ED, its searches led to the recovery and seizure of documents and records relating to the incorporation and use of shell companies and the operation of a large number of bank accounts in cooperative banks opened in the names of associates of the accused.
The agency said 215 bank accounts linked to the accused entities and associated persons were frozen under Section 17(1-A) of the PMLA. Cash amounting to Rs 20 lakh was recovered and seized from the residential premises of Pravin Tayal.
The searches also led to the identification of records relating to various immovable properties allegedly linked to the promoter/directors, which the agency said had been concealed from the ED and banks. Fresh non-performing assets (NPAs) created by group companies were also unearthed during the searches.
The investigation stems from ECIRs registered by the ED's Kolkata Zone-II in connection with alleged large-scale bank fraud involving Tayal Group companies, including K. Lifestyle & Industries Ltd., Actif Corporation Ltd. and Jaybharat Textiles & Real Estate Ltd.
The agency has estimated the proceeds of crime in these cases at around Rs 820.86 crore.
The ED alleged that the group generated and availed bank funds through falsified stock statements, inflated production claims and unauthorised sale of hypothecated machinery.
The funds were allegedly layered through shell companies and diverted into real estate assets, including Empress Mall in Nagpur, which was provisionally attached during the investigation at an estimated value of Rs 483 crore, along with other immovable properties.
The agency has also alleged a nexus between the promoter-directors, shell companies and Resolution Professionals in attempts to frustrate action under the PMLA.
According to the ED, after attachment of assets, the accused promoters/directors allegedly initiated corporate insolvency resolution process (CIRP) proceedings through shell entities under Section 7 of the Insolvency and Bankruptcy Code (IBC).
The agency alleged that these entities were controlled by the accused and were used as sham creditors to protect group assets.
The ED further alleged that the RPs assisted the promoters by admitting unverified and inflated claims of related parties, thereby reducing the voting share of secured lenders. Searches were also conducted at the premises of RPs Kiran C. Shah, Vinod P. Ambavat and Ravi Kapoor, as well as certain associated entities.
The agency alleged that the RPs filed applications seeking to set aside PMLA attachments, suppressed adverse orders in such proceedings before courts and tribunals, and created encumbrances that prevented the ED from taking possession of rent generated from attached properties.
The agency said rent worth several crores continued to be received by companies allegedly floated by the accused.
The ED said a similar modus operandi was found in an investigation by its Ahmedabad Zone involving Tayal Group entity Vidhant Realty Pvt Ltd.
The agency alleged that insolvency proceedings were initiated against the company through another group entity, Kausar Textiles Pvt Ltd, to frustrate PMLA attachment proceedings.
In that case, Cubical Realty Pvt Ltd became the successful resolution applicant, which the ED said was in violation of Section 29A of the IBC as it was beneficially owned by members of the Tayal family, including Pravin Kumar Tayal and Navin Kumar Tayal.
Further investigation is underway, the ED said.
Source: IANS
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