The Mumbai zonal office of the directorate of enforcement (ED) has provisionally attached movable and immovable properties in the form of land and building and amount lying in bank fixed deposits (FDs) worth Rs43.52 crore under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in the case of bank fraud by Ushdev International Ltd (UIL) and others.
Based on a first information report (FIR) registered by the central bureau of investigation (CBI), the ED initiated an investigation against UIL in the Rs1,438.45 crore bank fraud.
The ED investigation revealed that the funds granted as loans by multiple banks to Ushdev International were diverted to different entities under the guise of advances and unsecured loans.
Later on, after layering through multiple bank accounts, these funds were ultimately transferred to India-based companies where the overseas subsidiaries of UIL are major shareholders. These subsidiaries were controlled and managed by directors and major shareholders of Ushdev International, the ED says.
Further, Ushdev International was granted credit facilities (fund based and non-fund based) from multiple banks and out of these funds granted by the banks, majority of the funds were siphoned off by Ushdev International to many overseas entities that were incorporated by its directors, promoters or shareholders.
During the investigation, assets worth Rs43.52 crore of directors and shareholders of Ushdev International and its group of companies lying in India were identified which are provisionally attached under section 5 of PMLA, 2002. Earlier, in February 2023, the ED conducted searches at the premises of UIL and other related entities and persons.
As
reported by Moneylife, Ushdev International was founded by the late Vijay Gupta who started operation as a commission agent and later set up a power generating and steel trading company. The promoters have a 54% stake and the rest is publicly held.
The 44-year-old Prateek Gupta has been managing director (MD) after his father's demise in 2009. His mother, Suman Gupta, who is a citizen of the Republic of Dominica (a tiny Caribbean island), became the chairperson, while his younger brother was appointed vice-chairman. The company was apparently profitable until FY15-16 when it reported Rs52 crore profit.
Interestingly, the very next year, FY16-17, it reported a significant Rs229 crore loss. Things went downhill for the Indian business very rapidly and it figured in the Reserve Bank of India (RBI)'s second list of the top 30 defaulters and was dragged into bankruptcy proceedings soon after the Insolvency and Bankruptcy Act (IBC) was passed.
In 2017, when the State Bank of India (SBI) filed insolvency proceedings, Ushdev owed over Rs3,500 crore to secured lenders and a few hundred crore rupees to others. SBI approached CBI, which, finally, registered a case against Mr Gupta and his mother, Suman, in 2022 after conducting raids at multiple locations. The Guptas were accused of causing a loss of Rs1,438 crore to SBI and four others by diverting funds through loans and advances to related entities, manipulating accounts and showing false sales to dormant overseas entities. (
Read: Prateek Gupta: The Big Indian Defaulter behind a $500 Million International Commodities Fraud )
Last year in March, the Supreme Court (SC) stayed the Bombay High Court (HC) order which allowed Ushdev International chairperson Suman Vijay Gupta to travel abroad on an undertaking.
