ED Searches 13 Places in Concast Steel and Power's Rs6,210 Crore Bank Fraud Case
Moneylife Digital Team 19 December 2024
The Kolkata zonal office of the directorate of enforcement (ED) conducted search operations at 13 places of Concast Steel and Power Group under the provisions of the Prevention of Money Laundering Act (PMLA) in a bank fraud case. Concast Steel and Power Group had availed credit facilities from 11 public sector banks (PSBs) and five financial institutions having total default of Rs6,210 crore as the company loan turned into a non-performing asset (NPA) on 30 September 2016.
 
The banking securities fraud branch (BSFB) of central bureau of investigation (CBI) filed the first information report under various sections of the Indian Penal Code (IPC) and Prevention of Corruption Act against promoter Sanjay Sureka and others based on a complaint filed by State Bank of India (SBI), the lead bank of the consortium.
 
 
Based in Kolkata, the Concast group is promoted by Sanjay Sureka and has integrated facilities in West Bengal, Odisha and Andhra Pradesh for producing sponge iron, pig iron, mild steel, rolled products including TMT bars, angles, channels and ferro alloys.
 
Concast Steel and Power Ltd availed multiple letter of credit (LC) facilities from the consortium of banks which were, subsequently, devolved. "Majority of these LCs were opened in the name of related parties from where the funds were diverted to accounts of group companies and personal accounts. During the searches, it was found that the promoter had created a maze of shell entities in the name of his employees, relatives and associates with an intention to divert and launder the loan funds obtained from a consortium of banks," ED says.
 
The diverted funds were utilised for personal expenses and buying various movable and immovable properties, the agency says. During the search operations gold and jewellery worth Rs4.5 crore and eight vehicles, including luxury vehicles, were found and seized. Various incriminating documents and digital evidence have been found and are being examined, ED added.
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