The Enforcement Directorate has arrested an individual in reference to a concealment case linked to an alleged Rs 750 crore loan fraud committed by misusing credit facilities, the central probe agency said on Saturday.
It said Sai Chandrasekhar was arrested under the Prevention of cash Laundering Act on Friday following which an area court here sent him to seven days ED custody.
The money laundering case against Chandrasekhar pertains to a search initiated by the agency against Virkaran Awasty, Vinod Sirohi and KPMG India Pvt Ltd, it said during a statement.
The PMLA case was filed against them after studying an FIR registered by the economic offences wing (EOW) of the Delhi Police on the idea of a complaint received from Hassad Netherlands BV.
Hassad Netherlands BV, a subsidiary of Hassad company , was “induced” by Virkaran Awasty and Ritika Awasty, Directors of Bush Foods Overseas Pvt Ltd, to spare funds amounting to USD 120 million (about Rs 750 crore) by misrepresenting the extent of stocks/inventory, the ED alleged.
“On the idea of such misrepresentations, the accused persons induced Hassad Netherlands BV to supply corporate guarantee for the outstanding amount of Rs 714 crore of credit facilities availed from consortium of banks.
“Credit facilities were availed by Bush Foods Overseas Pvt Ltd on the idea of non-existent stocks and inventory,” the agency claimed.
Probe found, it said, Virkaran Awasty along side other directors created bogus stocks by inflating the inventory and fabricating financial statements of the corporate .
“Bulk transactions of sales and purchases were generated in order that Bush Foods could record increased turnover, profit margins and extra stock by generating approximately equal value of sales and purchases during a year.
“Artificial profit and artificial stock within the value of inventory was recorded within the books by showing these bulk sales as domestic sales,” it alleged.
Chandrasekhar, it said, was an employee of Hassad Foods Company and was a part of team which evaluated the transactions.
The agency charged that Chandrasekhar “colluded and conspired” with Virkaran Awasty to “cheat” Hassad Netherlands.
“Chandrasekhar had a pivotal role and responsibility within the business transactions between Bush Foods Overseas Pvt Ltd and Hassad Netherlands BV. He also had a key role in negotiations, discussion and due diligence administered by Hassad on Bush Foods,” it said.
