The Directorate of Enforcement (ED) has taken action against a Ludhiana based company, M/s SEL Textiles Limited, in connection with a bank fraud case. ED has provisionally attached movable and immovable assets worth ₹828 Crore in the form of land & building and plant & machinery.
The ED had initiated an investigation under the provisions of Prevention of Money Laundering Act, 2002 based on an FIR registered by the Central Bureau of Investigation (CBI) against M/s SEL Textiles Limited and its directors for cheating and misappropriation of loan amount to the tune of ₹1530 Crore.
During the course of the investigation, the ED found that M/s SEL Textiles Limited and its directors had fraudulently diverted the loan amount availed from the consortium of banks led by Central Bank of India by using various modus operandi. The company had made investments in step-down subsidiaries in violation of the terms and conditions of the loan availed, made advance payments to related parties in guise of procuring goods and services which never materialized, purchased residential property for personal use, made payments in lieu of import of machineries through intermediaries for which the import is pending even after a lapse of more than 10 years, and non-realization of export proceeds.
The ED’s provisional attachment of assets worth ₹828 Crore is a significant move in the case of bank fraud, and the investigation is ongoing. This step taken by the ED sends a strong message to other companies and individuals who may attempt to engage in fraudulent activities, that their actions will not go unnoticed and will be met with swift and strong action by the authorities.
It is a specialized agency under the Department of Revenue, Ministry of Finance, and is responsible for enforcing two important laws, namely the Foreign Exchange Management Act (FEMA) and the Prevention of Money Laundering Act (PMLA). The ED has been successful in investigating and prosecuting a number of high-profile economic offenses and financial crimes in the country.
