The Lucknow zonal office of the Enforcement Directorate (ED) on Friday took major action in the bank fraud case of about Rs 450 crore and raided 8 locations in Delhi, Uttar Pradesh and Punjab against Santosh Overseas Ltd. (M/s Santosh Overseas Ltd.) and its associated companies. This action of ED is being taken under the Prevention of Money Laundering Act (PMLA), 2002. This investigation is based on the case registered by CBI, in which Santosh Overseas Limited is accused of fraud by taking a loan of about Rs 450 crore from a consortium of banks.
Investigation has revealed that instead of investing the loan amount directly in the business, the company allegedly diverted it through shell companies, entry operators and other related entities. For this, fake bills (invoices) were made and attempts were made to hide the real source of money through circular financial transactions.
The ED team is currently searching documents and digital evidence at the locations of the company's promoters, their associated companies and alleged associates. According to the agency, the search operation is going on peacefully at all places.
The ED alleges that the loan money was diverted and layered through a network of shell companies, accommodation entry operators (hawala dealers) and related companies through fake invoices and circular financial transactions.
