Hyderabad: The Enforcement Directorate (ED) on Friday provisionally attached immovable properties worth Rs 26.86 crore belonging to Saubhagya Ispat India Pvt Ltd in connection with a bank loan fraud case. The ED’s Hyderabad office issued a statement confirming the action.
According to the agency, the attached properties include flats, houses, residential plots, and agricultural lands.
Loans attained through forged documents
The case relates to allegations that the company obtained loans from the then Andhra Bank—now merged with Union Bank of India—by submitting forged and misleading documents. Based on these allegations, the Central Bureau of Investigation (CBI), Banking Frauds Division in Bengaluru, had earlier registered a case against the directors of Saubhagya Ispat and others.
Based on the CBI case, the ED initiated a separate investigation under the Prevention of Money Laundering Act (PMLA) to probe the suspected diversion of funds.
Investigations revealed that Saubhagya Ispat India Pvt Ltd had obtained loans from Andhra Bank, claiming that the funds would be used to expand its steel manufacturing operations. To secure the loans, the company allegedly submitted false financial documents and claimed to have large inventories of stock.
However, instead of using the borrowed funds for business purposes, the accused allegedly diverted the money to related entities. They then created fictitious transactions through these entities to show inflated sales and artificially strengthen the company’s financial position.
Using these manipulated records, the company reportedly obtained additional credit facilities from the bank.
Large portions of loan amounts siphoned off to personal accounts: ED
The ED said the directors siphoned off large portions of the loan amounts into their personal accounts and used the funds to acquire various properties.
The total fraud amount has been estimated at Rs 46.52 crore. Out of this, the bank has so far recovered Rs 15.52 crore on its own, while the remaining Rs 31 crore is yet to be recovered.
During the investigation, the ED identified properties worth Rs 26.86 crore that were allegedly purchased using the proceeds of crime. These assets have now been provisionally attached as part of the ongoing investigation.
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