NAGPUR: The Enforcement Directorate (ED) has frozen assets worth Rs 209 crore and seized Rs 55 lakh in cash from Nagpur businessman Manoj Jayaswal entity – Corporate Power Limited (CPL). The ED describes the assets as proceeds of crime (POC) from a loan fraud in which ₹4,000 crore were allegedly diverted from a PSU bank.
The fraud amount goes beyond Rs 11,300 crore if the interest is added.The financial assets seized include shares of listed companies, mutual funds, and fixed deposits, apart from Rs 55 lakh in cash, according to a press release shared by the ED.
Cases have been booked against Jayaswal’s sons, Abhijeet and Abhishekh, too.
The probe revealed that the company not only used a web of 250 shell companies but also 20 charitable organisations for money laundering. The action was taken following a raid on the company’s premises in Nagpur, Kolkata, and Vishakapattanam on Tuesday and Wednesday.
Jayaswal headed the Abhijeet Group of companies, which was among the biggest beneficiaries of the UPA regime’s controversial coal block allocation scheme. Abhijeet Group was also ranked among the country’s top bank defaulters. The companies were sitting on huge debt, which ultimately turned into NPAs. CPL was one of the entities that had borrowed from Union Bank but ended up in a default. Known for his flamboyant lifestyle, Jayawal had also purchased a private jet which is now grounded at the Nagpur airport after a loan default.
The CBI had registered a case against the CPL promoters for manipulating the project cost and other financial statements to avail loans. The loan amount was later diverted to purposes other than stated, leading to a loss of Rs 4,000 crore to Union Bank, says the press release. With interest, the amount comes to Rs 11,379 crore. Apart from CPL, two more bank frauds worth Rs 136 crore and Rs 180 crore were committed through two more group companies – Corporate Ispat Alloys Limited (CIAL) and Abhijeet Integrated Steel Limited (AISL) respectively, said the release.
The ED investigation also revealed that the company’s promoters had colluded and engaged in booking fictitious transactions in the company’s books of accounts as well as those of its related entities. The search revealed that the Abhijeet Group had created a web of 250 shell companies, which were used for layering, integration, and utilisation of the proceeds of crime. The shell companies were also used to introduce share premium in the accounts and inflate the balance sheet. The fudging of accounts helped the company avail fresh bank loans.
A network of 20 charitable institutions was identified, which were used as conduits for the proceeds of crime. The funds were also parked in immovable properties, apart from shares and mutual funds, the release said.
Jayaswal shot into the limelight over a decade ago after the coal allocation scam came to the fore. The Abhijeet Group had been allotted a number of coal blocks. For CPL, the company had plans to set up a power plant at Latehar in Jharkhand. However, the Abhijeet Group began defaulting in repaying loans after the plans of CPL and other companies were held up after the coal blocks were wrested back from the beneficiaries. Later, a case of loan diversion was filed against the companies.
