ED Freezes Rs.209 Crore in Assets, Seizes Rs.55.85 Lakh in Cash in Massive Loan Fraud Case

The Enforcement Directorate (ED) conducted searches from Monday to Wednesday across Nagpur, Kolkata, and Visakhapatnam, leading to the freezing of assets worth ₹209.08 crore and the seizure of ₹55.85 lakh in cash. This operation was part of an ongoing investigation into a significant money-laundering case involving Corporate Power Limited (CPL), its promoters, and others. The agency targeted both official and residential premises belonging to the accused, confiscating incriminating documents along with the frozen assets, which included listed shares, securities, mutual funds, fixed deposits, and bank balances. ED sources confirmed the agency’s actions, linking them to the proceeds of crime.

CPL, a Special Purpose Vehicle (SPV) established in 2006 by the Abhijeet Group for a power project in Jharkhand, was at the center of this probe. The ED’s investigation revealed that the promoters of CPL were allegedly involved in orchestrating fake transactions and manipulating financial records within the company and its related entities. The SPV, often used to manage specific projects while minimizing financial risk, was misused in this instance for fraudulent activities. Further investigations revealed that other entities within the Abhijeet Group were also implicated in similar bank loan frauds.

These fraudulent activities were brought to light following an FIR filed by the Central Bureau of Investigation (CBI) based on a complaint from the public-sector Union Bank of India (UBI). According to the FIR, the accused had manipulated project cost statements to secure loans, which were later diverted for unauthorized uses. The resulting loss of ₹4,037 crore to the bank, combined with interest, has now escalated to ₹11,379 crore. The CBI’s case also accused CPL’s promoters and others of criminal conspiracy, cheating, and forgery.

Additionally, the ED uncovered a web of over 250 shell companies that were allegedly established by the Abhijeet Group to layer, integrate, and launder the proceeds of crime. These entities were used to inflate the financial statements of Abhijeet Group companies by introducing fictitious share premiums, thereby enabling the companies to secure new loans from banks through manipulated financial records. A network of approximately 20 charitable institutions was also identified, believed to have been used for laundering the illicit funds.

Aside from the frozen assets, the ED also uncovered details of properties linked to the Abhijeet Group, estimated to be worth over ₹50 crore. These assets were believed to have been acquired using proceeds from the fraudulent schemes. ED sources also disclosed that in addition to the key accused, several other individuals involved in facilitating the money laundering have been identified. Statements from these individuals have been recorded under the Prevention of Money Laundering Act (PMLA).

Manoj Jayaswal, who led the Abhijeet Group, had previously gained prominence during the coal block allocation scandal. His group had been one of the largest beneficiaries of the coal block allocations during the UPA government. However, despite this advantage, many of the group’s companies fell into heavy debt and became non-performing assets (NPAs). One such company, CPL, borrowed from Union Bank but eventually defaulted on the loan. Known for his extravagant lifestyle, Jayaswal had purchased a private jet, which remains grounded at Nagpur airport following a loan default.

The ED’s probe has also expanded to include other group companies such as Corporate Ispat Alloys Limited (CIAL) and Abhijeet Integrated Steel Limited (AISL). These companies are accused of defrauding banks of ₹136 crore and ₹180 crore, respectively. Investigations revealed that plans for a power plant in Jharkhand, which CPL had intended to build, were halted after the group defaulted on its loans, leading to further allegations of loan diversion and financial mismanagement.