Rs637 Crore Bank Loan Scam: ED Conducts Searches on Arvind Remedies and Promoter Arvind B Shah

Moneylife Digital Team 05 September 2025

Economy & Nation

The directorate of enforcement (ED) has launched a major probe into Arvind Remedies Ltd and the company promoter, Arvind B Shah, following allegations of a massive bank fraud amounting to Rs637 crore.

In a release, the agency says its Chennai zonal office conducted extensive search operations on 2nd September and 3 September 2025 across multiple locations linked to the company, its promoters, dummy directors, and key persons in Chennai, Kancheepuram, Goa, Kolkata, and Mumbai. The action was taken under the Prevention of Money Laundering Act (PMLA), 2002, based on a first information report (FIR) registered by central bureau of investigation (CBI).

The investigation stems from a complaint by Punjab National Bank (PNB), which led a consortium of banks, including United Bank of India, State Bank of India, IDBI Bank, Allahabad Bank, Karur Vysya Bank, Indian Overseas Bank, and Corporation Bank. The consortium had extended credit facilities totalling Rs 704.75 crore, of which Rs 637.58 crore remained outstanding as of 30 September 2016. All loans had since been declared non-performing assets (NPA).

ED says its investigation revealed that the funds were siphoned off through shell companies controlled by the promoters. Dummy directors, appointed through brokers, managed these shell entities while remaining unaware of their operations. Funds were rotated among these companies to inflate turnover, induce banks to lend more, and manipulate share prices for personal gain.

Part of the diverted funds was also allegedly used to acquire assets, while assets pledged as security to the banks were sold without the banks’ knowledge, depriving them of recovery options.

During the searches, dummy directors admitted they were unaware of the company’s affairs, receiving cash salaries and signing cheques for nominal commissions without knowing their purpose.

ED's search operations led to the identification of immovable assets and shares held in the names of family members and distant relatives to prevent banks from enforcing recovery. Approximately 15 lakh shares of listed and unlisted companies owned by the promoters have been frozen, with valuation currently in progress. Several incriminating digital and documentary evidence were also seized.

ED says investigations are ongoing, and further action will follow as more evidence is evaluated.

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