The Uttar Pradesh Police has arrested two senior officials of brokerage firm SMC in the alleged multi-crore UP Power Corporation Limited (UPPCL) employees’ provident fund (PF) scam.
In the scam, Rs 4,122 crore was illegally invested in private mortgage lender Dewan Housing Finance Corporation Limited (DHFL).
Fresh arrests were made by the economic offences wing (EOW) of the police after establishing the alleged complicity of the brokerage in the scam.
Those arrested have been identified as SMC deputy director Alok Garg and another senior official Mahesh Gupta.
According to sources, the duo had been subjected to intense interrogation over the past few days with regard to the ongoing probe.
So far, 16 persons, including senior UPPCL officials, have been arrested even as the Enforcement Directorate (ED) started a parallel probe into the money laundering angle in the scam.
Last month, the ED had registered a money laundering case in New Delhi and an ED team had arrived in Lucknow later and met EOW sleuths probing the PF scam case.
“ED officials were briefed about the case and the probe conducted by the EOW. They also took along some documents for investigating the money laundering angle in the PF investment episode,” EOW director general Rajendra Pal Singh had earlier told Business Standard.
Both the EOW and ED probes are underway concurrently.
While EOW is probing the alleged criminal conspiracy and unauthorised investment of the PF corpus in DHFL, the ED seeks to unearth any money laundering syndication.
While Rs 4,122 crore was parked with DHFL between March 2017 and December 2018, about Rs 2,267 crore is outstanding with the company, which has been barred by the Bombay High Court from making fresh repayments.
This is owing to another ongoing ED probe into money laundering.
The funds were channelised in installments through 28 brokerages or bogus firms allegedly in connivance with the officials managing the two UPPCL PF trusts.
In November, the EOW had arrested the then UPPCL managing director A P Mishra, now retired, apart from suspended officials Praveen Kumar Gupta and Sudhanshu Dwivedi in the case. Besides, those arrested included chartered accountants (CA) and owners of brokerage or bogus investment firms.
While Rs 4,122 crore was invested in DHFL, the corpus was also parked in LIC Housing Finance and PNB Housing Finance with the investments in the three NBFCs totalling Rs 6,600 crore.
Meanwhile, the state has also started the process of disinvesting the PF corpus in LIC Housing and PNB Housing.
The UP government has even recommended a CBI probe, although the central agency is yet to take over the case.