Mumbai: ED conducts searches in Rs 4,500-cr worth investment 'fraud' case

The Enforcement Directorate on Monday said it has conducted searches in a money laundering case linked to an alleged investment fraud of Rs 4,500 crore with about 50 lakh depositors by a Mumbai-based company and its promoters. The raids were undertaken on February 28 against Pancard Clubs Limited (PCL), its former directors and others, the federal agency said in a statement.

This is a case of alleged fraud through a collective investment scheme (CIS), in violation of the SEBI Act, where more than 50 lakh investors were allegedly duped of over Rs 4,500 crore, it said.

The economic offences wing (EOW) of the Mumbai Police had filed a case under the Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act, 1999, against Pancard Clubs Limited and others and the ED took its cognisance to file a case under the Prevention of Money Laundering Act (PMLA).


Pancard Clubs Ltd. and its directors "floated" various investment schemes of different durations, ranging from three to nine years, with a promise of hotel discounting, accidental insurance and other benefits including "high-rate" of returns against the deposits made by the public, "ignoring" prevailing norms of SEBI and the Reserve Bank of India (RBI), the ED said.

It said "incriminating" documents bearing details of overseas assets -- currently being operated by family members of the main accused and former director of the company late Sudhir Moraveker -- were seized.

It has also been found that these assets have been yielding lease rental income, the agency said.

Some documentary "evidence" was also found during the raids that shows that "attempts were made to dispose of the assets, prima facie being part of the proceeds of crime, by the co-accused.