The Enforcement Directorate (ED) on Friday arrested Sandip Jhunjhunwala, Managing Director of REI Agro Ltd, in connection with a money-laundering investigation against him for allegedly defrauding a consortium of banks to the tune of Rs 3,871.71 crore.
Jhunjhunwala is accused of “diverting the fund fraudulently for the purpose other than for which it was sanctioned”.
The agency, in 2016, had registered a money laundering case against the company which claims to the world’s largest basmati rice processing firm, and its directors based on the Central Bureau of Investigation’s (CBI) October 2015 case.
The CBI FIR alleged REI Agro, its directors — Sandip and Sanjay Jhunjhunwala — and others availed various credit facilities from 14 banks under consortium arrangement led by UCO Bank and defrauded them from 2013 onwards to the tune of Rs 3,871.71 crore.
In its investigation, the ED found REI Agro and its directors diverted the funds sanctioned as working capital loan by the consortium of banks using different modes including trading in fake bills, investing the money in Varrsana Ispat Pvt Ltd directly and through controlled companies.
Setting the higher amount of “Capex advances” to various shell companies by way of arbitration at a very low amount, showing the higher cost of construction and arranging fake purchase and sale bills were the other forms of modus operandi used by the REI Agro, an ED statement said.
It also revealed that Sandip was engaged in arranging false purchase and sales of invoices of rice and paddy through brokers and dealers of Delhi for availing maximum working capital limits from the consortium of banks and diverted working limits for capital expenditure, the statement said.
“Sandeep has also illegitimately diverted the funds over Rs 600 crore through Kolkata-based shell companies to the accounts of associates companies or companies controlled by him using banking channels.
“Later on, part of the above amount, approximately Rs 300 crore, was settled through arbitration against taking over of land valued around Rs 22 crore. He also arranged fake bills of iron and steel to the tune of more than Rs 25 crore and showed it as capital expenditure but received back this amount in cash,” said the statement.
Earlier, the ED had attached properties of REI Agro in the form of land located at Sonipat in Haryana, of Varrsana Ispat, in the form of machinery and equipment, land and buildings located in Kutch district of Gujarat, of Quick Connect dot com and its director located at Sainik Farm in Delhi, totalling worth Rs 411.24 crore.