ED arrests SP leader Tiwari, aide in Rs 750 crore bank 'fraud' case

The Enforcement Directorate (ED) on Monday arrested former Uttar Pradesh MLA Vinay Shankar Tiwari and a senior official of his company in a money laundering investigation linked to an alleged bank loan fraud of Rs 750 crore, official sources said.

The money laundering case stems from an FIR filed by the Central Bureau of Investigation (CBI).

Tiwari, 59, was taken into custody from the state capital Lucknow around 5 pm. Ajeet Pandey, the managing director of his company called Gangotri Enterprises, was apprehended from Mahrajganj district around the same time under the Prevention of Money Laundering Act (PMLA), the sources said.

Tiwari, the Samajwadi Party (SP) strongman, was produced here before a special PMLA court that sent him to a day-long judicial custody. He and Pandey will be produced again before the court on Tuesday where the ED is expected to seek their custodial remand.

Tiwari is the son of a former minister and strongman from Gorakhpur, late Hari Shankar Tiwari. He represented his father's assembly constituency of Chillupar in Gorakhpur on a BSP ticket before joining the SP. The arrests were preceded by fresh searches against the company and its promoters at multiple locations in the state on Monday.

The main promoters of Gangotri Enterprises are Vinay Shankar Tiwari, Rita Tiwari and Ajeet Pandey.

These accused are alleged to have indulged in an alleged bank loan fraud of about Rs 750 crore between 2012 and 2016 against a consortium of banks led by the Bank of India (BoI), according to the sources.

Gangotri Enterprises undertakes construction of roads, and operates toll plazas and other government contracts.

The agency had attached assets worth about Rs 72 crore of the company in this case in November, 2023 and had also carried out raids at that time.

The ED had alleged in a statement that the Gangotri Enterprises Ltd, "in collusion" with its promoters, directors and guarantors "fraudulently", availed credit facilities to the tune of Rs 1,129.44 crore from a consortium of seven banks led by the BoI.

The said credit facilities were not repaid and were "grossly diverted and misappropriated" by Gangotri Enterprises Ltd and its promoters, directors and guarantors in violation of banking norms, causing wrongful loss to the tune of Rs 754.24 crore to the consortium of banks, the agency said.