ED attaches over Rs 100 cr assets in bank fraud case

The Enforcement Directorate (ED) today attached assets worth over Rs 100 crore of a basmati rice processing firm in connection with an alleged bank fraud case.
The agency said it has "provisionally attached assets worth Rs 100.23 crore under the Prevention of Money Laundering Act of Ms REI Agro Limited".
The ED, in 2016, had registered a money laundering case against the company, which claims to the world's largest basmati rice processing firm. The alleged bank fraud is pegged at Rs 3,871.71 crore.
"It was alleged that REI Agro Limited and its directors, Sandip Jhunjhunwala, Sanjay Jhunjhunwala and others, availed various credit facilities and limits from various banks under consortium arrangement including UCO Bank and defrauded the banks from 2013 onwards to the tune of Rs 3871.71 crore, by diverting the funds fraudulently for the purpose other than for which the same was sanctioned," the ED had said.

With the latest attachment, the total seizure of assets in this case stands at Rs 511.47 crore.
The agency said its investigation revealed that REI Agro Ltd and its directors and others, "diverted the funds sanctioned as working capital loan by 14 banks under a consortium led by UCO Bank using different modus operandi."
They allegedly invested the money in Varrsana Ispat Pvt Ltd directly and through controlled companies, set higher amount of capex advances given to various companies by way of arbitration at a very low amount, showed higher cost of construction and by way of arranging fake purchase or sale bills, etc, the agency said in a statement.