Bank loan fraud: ED attaches Rs 166-crore worth assets of Maharashtra company

The Enforcement Directorate (ED) on Thursday said it has attached assets worth Rs 166 crore in a money-laundering probe linked to an alleged bank loan fraud that took place in Maharashtra. It said a total of 20 residential flats and plots located in Pune, Mumbai and Ratnagiri districts of Maharashtra have been provisionally attached under provisions of the Prevention of Money Laundering Act (PMLA) in a case against Varron group of Industries.

The firm is accused of "discounting Letters of Credit or LC (issued by banks) on the basis of forged bills" and the total value of the attached properties is Rs 166 crore.

The ED case was filed after studying a CBI charge sheet against the company and its director late Shrikant Pandurang Sawaikar and unknown officials of Bank of India (BoI) and Canara Bank.


The federal agency said its investigation found that a "criminal conspiracy was hatched by prime accused S P Sawaikar, director of Varron Aluminium (VAPL), and his accomplices to cheat BoI by inducing it to discount 246 forged bills, backed by LC, of around Rs 300 crore opened by Canara Bank, Deccan Gymkhana Branch in Pune on behalf of VAPL".

"BoI negotiated and discounted the amount of the said bills in account of VAPL after deducting its charges," it alleged.

An amount of Rs 293 crore was credited in the account of beneficiary company VAPL "on the basis of false assurances and forged documents."

"Part of the said loans was diverted and later on due date, Canara Bank denied the issuance of the relevant LCs. BoI did not get the amount on due date and hence suffered a wrongful loss of Rs 293 crore," the ED said.

The "money was layered multiple times through group companies and various shell entities floated by late S P Sawaikar and his accomplices."

"It was found that said proceeds of crime was eventually used for purchasing immovable properties including residential flats, land and part of it was used in group companies of Varron group like Varron Aluminium, Varron Auto Comp and Varron Industries," the ED said.