The Directorate of Law Enforcement (ED) has arrested the director of a Hyderabad-based company in connection with a money laundering investigation linked to an alleged fraud of a bank loan of Rs 370 crore, a the agency announced on Thursday.
Balvinder Singh, director of PCH Corporation Ltd and other PCH group companies, was arrested on February 8 and arraigned before a special Prevention of Money Laundering Act (PMLA) court in Hyderabad on Wednesday.
The court placed him in custody until February 23, the ED said in a statement.
This money laundering case, related to the alleged bank fraud to the tune of Rs 370 crore, was filed by the ED after studying an FIR CBI and an indictment filed against the accused.
“In the CBI indictment sheet, it is alleged that PCH Agencies Pvt Ltd, PCH Lifestyle Pvt Ltd, Balvinder Singh and others caused undue loss in Punjab and Sind Bank, George Town Branch, Chennai, in fraudulently using credit facilities by submitting fabricated documents to show higher turnover and then misappropriating loan funds,” the ED said.
He added that later two more FIRs were registered by the Central Bureau of Investigation (CBI) against PCH Group companies.
PCH Group companies have taken loans from various public and private banks and “failed” to repay them, the ED said.
“Amounts received as loan were diverted by shell companies with the help of CAs (chartered accountants) and entry operators (hawala dealers) in Hyderabad and Mumbai and they were recovered from the group companies PCH for the purpose of showing a rosy false picture about the financial health of the PCH group, for the purpose of qualifying for more loans and also for the purpose of a planned IPO (initial public offering).
“Part of these misappropriated amounts were also received in the personal account of Balvinder Singh and his family members and relatives,” the agency said in the statement.
Singh, he said, received amounts totaling Rs. amounts were projected by him as “unsecured” loans.
“The source of these funds is nothing but the embezzled loan and they were used to purchase properties in the names of Singh’s companies as well as personal names which were then mortgaged to banks to avail of more credit facilities. These unsecured loans have not been repaid till date,” the ED said.
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