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A Recent Arrest in Massive Bank Loan Fraud by ED
As part of an ongoing investigation into an alleged bank loan fraud of Rs 25,000 crore, the Enforcement Directorate (ED) detained Arvind Dham, director and promoter of a bankrupt auto parts manufacturer, last Tuesday, the ED revealed. A specific court centered on Prevention of Money Laundering Act (PMLA) gave the directive for a seven-day ED custody for Dham.
A CBI FIR initiated due to written grievances from IDBI Bank and the Bank of Maharashtra led to the money laundering lawsuit against the firm and its officials, according to the ED.
The company, Amtek Group, and its directors were alleged to have caused a loss of Rs 673.35 crore to the banks through diversion of loans by fraudulent activities. Based on a public interest petition case against the Amtek Auto group of companies, the Supreme Court instructed the ED to probe in February. In consequence, the ED carried out raids at various official and residential locations tied to the company last month.
The ED stated that the Amtek group failed to repay loans over Rs 25,000 crore from a plethora of banks. This caused a significant loss to the banks due to a reduction of over 80 per cent once companies belonging to the Amtek group were taken to insolvency, it alleged.
According to the agency, Dham held number of properties beneficially under several entities, with several Amtek group workers serving as their directors. However, these properties were allegedly never disclosed to the creditors or the banks.
Frequently Asked Questions
What is the background of the Amtek Group case?
The Amtek Group case revolves around a massive loan default involving more than 15 banks. The group is suspected of diverting loans through fraudulent activities that resulted in significant losses for the banks. After the group’s companies were taken to insolvency, the banks underwent a substantial loss due to a more than 80 per cent reduction.
What is Arvind Dham’s role in this case?
Arvind Dham, one of the directors and promoters of the Amtek Group, was implicated in the case. The ED suggests that he was the “beneficial owner” of multiple properties held under different companies, with employees from the Amtek Group acting as directors. However, these properties were supposedly never revealed to the banks or creditors.
How did the ED’s arrest come about?
Arvind Dham’s arrest came about as a result of an ED investigation into the alleged bank loan fraud of Rs 25,000 crore by the Amtek Group. The ED had been given a directive by a special PMLA court to detain Dham for seven days, after which he was placed under ED custody.