ED attaches Rs1,122 crore assets of Diamond Power
The Enforcement Directorate (ED) said it has also attached some belongings of Diamond Power founder Suresh Bhatnagar and other company officials
Ahmedabad: The Enforcement Directorate (ED) on Tuesday said it has attached immovable property worth Rs1,122 crore belonging to Vadodara-based Diamond Power Infrastructure Pvt. Ltd over an alleged bank fraud.
In a statement, the ED said it has also attached some belongings of founder Suresh Bhatnagar, and his sons—Amit Bhatnagar, the managing director and Sumit Bhatnagar, the joint managing director—under Prevention of Money Laundering Act (PMLA).
The action follows a first information report filed by the Central Bureau of Investigation (CBI) against Diamond Power and its promoters for cheating banks and financial institutions of Rs2,654.40 crore.
The ED has also attached properties of related firms including Diamond Power Transformer Ltd, Diamond Projects Ltd, Mayfair Leisures and Northway Spaces.
An investigation revealed that Diamond Power entered into circuitous transactions of huge amounts with various parties, including its related parties, by issuing fake invoices without any actual sale/purchase of goods, the ED said in a statement.
“This was done with the dual intention of availing of CENVAT credit fraudulently, as well as projecting increased turnover before the banks in their financial records,” it added.
According to ED, Diamond Power has shown fake/fictitious entries of receivables in their books of accounts of around Rs1,000 crore from their debtors. On the basis of these numbers, it was able to get credit from banks.
On investigation, the ED found most of these figures to be exaggerated. Further, Diamond Power, through its related parties, was able to gain funds fraudulently to the tune of Rs261 crore by twisting and manipulating letters of credit from the banks, it said.
Diamond Power also diverted a huge amount of funds received as loan/cash credit to its real estate companies such as Northway Spaces and Mayfair Leisures, ED said.
The ED said there was little genuine business activity done by the Diamond group of companies and most business shown on records was from fictitious transactions.
The Congress has alleged that the promoters of Diamond Power have had links with senior BJP leaders and have demanded a high-level probe in the matter.
Earlier this month, deputy chief minister Nitin Patel asked the CBI to thoroughly probe the case and ensure the entire amount is recovered.
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