Loan fraud case: ED opposes bail plea of ex-Andhra Bank officer

The Enforcement Directorate (ED) today opposed the bail application of a former Andhra Bank director, arrested in an alleged Rs 5,000 crore bank fraud case involving a Gujarat-based pharma firm, saying he may hamper the ongoing probe.

The agency opposed the application moved by Anup Prakash Garg before the court of Additional Sessions Judge Sidharth Sharma in a written reply.

ED's special public prosecutor Nitesh Rana told the court that the allegations against Garg were serious as about Rs 300 crore worth of loans were passed at his behest.

"If granted bail, he may hamper the ongoing investigation, influence the witnesses in the case and there is also likelihood that he may flee from justice," Rana told the court.

The court posted the matter for further hearing on April 28.

Garg (59) was arrested by the probe agency on January 12 and is currently in judicial custody.

The ED had on February 9 filed a charge sheet against Garg under the sections of Prevention of Money Laundering Act (PMLA).

He was one of the three persons arrested in the case. The agency had earlier arrested Delhi-based businessman Gagan Dhawan and Rajbhushan Omprakash Dixit, one of the directors of the pharma firm, who are currently out on bail. All the three were arrested under the PMLA.

The ED had lodged the money laundering case after taking cognisance of an earlier FIR registered by the CBI.

The agency had claimed that during the probe, it had come across "certain entries" in a diary seized by the Income Tax department in 2011, which showed several cash payments amounting to Rs 1.52 crore made to one "Mr Garg, Director, Andhra Bank" by the Sandesara brothers between 2008 and 2009.

"Various cash payments were made to Garg, as reflected in the said entries, on the instructions of the Sandesara brothers, by withdrawing cash from the bank accounts of several benami companies owned by them," it had alleged.

The ED had claimed that Garg had infused several crores of his unaccounted money in various companies through several Kolkata-based bogus shell companies, with the help of cash or cheque entry operators in Kolkata, in order to launder the proceeds of crime obtained by him from the Sandesaras.

The CBI had booked Garg, the firm Sterling Biotech, its directors Dixit, Chetan Jayantilal Sandesara, Dipti Chetan Sandesara, Nitin Jayantilal Sandesara and Vilas Joshi, chartered accountant Hemant Hathi and some unidentified persons in connection with the case.

It had alleged that the company took loans of over Rs 5,000 crore from a consortium of banks led by Andhra Bank, which turned into non-performing assets. The FIR had also alleged that the total pending dues of the group companies stood at Rs 5,383 crore as on December 31, 2016.