New Delhi [India]: The Enforcement Directorate (ED) has arrested Raman Bhuraria, a Chartered Accountant, for his assistance and complicity in Rs 3,269 crore bank fraud of Shakti Bhog Foods Ltd, the agency said on Saturday.
Bhuraria was arrested under the provisions of the Prevention of Money-laundering Act, 2002 from Delhi on Friday.
This arrest was in continuation of rejection of his anticipatory bail by a special court and searches conducted by the federal agency on various locations pertaining to the arrestee.
During a search operation, various incriminating documents and digital evidence have been recovered, mentions an ED statement.
ED initiated a money-laundering investigation on the basis of FIR registered by the Central Bureau of Investigation (CBI) against Shakti Bhog Foods Limited and others, for criminal conspiracy, cheating, and criminal misconduct.
“The allegations against the accused include his active assistance and involvement in the bank fraud by way of round-tripping through related entities. Siphoning of the funds was being done through fictitious sale and purchase through various dummy and other entities,” said the ED statement.
After arrest, Bhuraria was produced before a special court on Friday and the court granted his custody to ED till August 20.
In July, the ED had arrested Kewal Krishan Kumar, chairman and managing director (CMD) of the Delhi-based Shakti Bhog Foods Limited, in a money laundering case linked to an alleged multi-crore bank loan fraud.
The ED case filed under criminal sections of the PMLA is based on a CBI FIR that was filed in early January this year against Shakti Bhog Foods Limited for an alleged fraud of Rs 3,269 crores on a consortium of 10 banks led by the State Bank of India (SBI).
The CBI complaint came after the SBI registered a complaint against the company.
According to the SBI, the directors allegedly falsified accounts and forged documents to siphon off public funds.
The 24-year-old company, which is into manufacturing and selling wheat, flour, rice, biscuits and cookies had grown organically as it ventured into food-related diversification over a decade with a turnover growth of Rs 1,411 crore in 2008 to Rs 6,000 crore in 2014, the bank had said.
The bank report to the CBI said the turnover growth of the company came to an abrupt halt in 2015 with the account turning into a non-performing asset (NPA) and it was ultimately declared a fraud in 2019.
The account turned an NPA on account of inventory losses owing to a steep fall in paddy prices, under-utilisation of capital expenditure in the rice and paddy segments, and a delay in the tie-up funds to tide over losses, an investigation report by the bank on staff accountability had noted in 2017.
A forensic audit done by the bankers pointed out that the company, in its account books of the financial year 2015-16, showed that its inventory worth over Rs 3,000 crore got damaged due to pests and was sold at substantially low prices.
This was contradictory to the stock and receivable audit report, which showed that the company had a stock of over Rs 3,500 crore in September 2015, its warehouses were fully stocked and none of the inventory was obsolete or slow-moving, the bank had alleged in its complaint.