ED Returns Properties Worth Rs.185 Crore to SBI and Other Banks against Rs.828 crore Bank Loan Loss

In a major win for public sector banks, the Directorate of Enforcement (ED) in Chandigarh has returned properties worth ₹185.13 crore to a State Bank of India (SBI)-led consortium of banks. The assets, seized from the now-defunct Surya Pharmaceuticals Ltd., were handed over via the Official Liquidator following a restitution order issued by the Hon’ble Special Court on October 25, 2024. This action is part of the ED’s ongoing efforts to restore misappropriated funds to victims of financial fraud under the Prevention of Money Laundering Act (PMLA).

The ED initiated its investigation into Surya Pharmaceuticals Ltd. after the Central Bureau of Investigation (CBI) filed several FIRs against the company. The investigation uncovered that Surya Pharmaceuticals, led by directors Rajiv Goyal and Alka Goyal, had used fraudulent means to secure loans from a consortium of banks, causing an estimated ₹828.5 crore loss. The company allegedly forged documents such as invoices, transport details, and lorry receipts to obtain Inland Letters of Credit (ILCs) and Foreign Letters of Credit (FLCs) from banks. The funds from these loans were funneled through a complex network of group companies and shell entities, effectively siphoning off the money and causing massive financial damage to the lending banks.

The ED found that the company had used round-tripping tactics to disguise the proceeds of crime, circulating funds through various accounts to create a misleading financial trail. Following these revelations, the ED issued a Provisional Attachment Order on October 14, 2022, seizing assets valued at ₹185.13 crore, including land, buildings, machinery, and fixtures located in Samba, Jammu

Rajiv Goyal and Alka Goyal, who allegedly orchestrated the fraud, fled India and were declared proclaimed offenders by a Chandigarh court on July 10, 2017. In light of this, the ED collaborated with the lending banks and the Official Liquidator appointed by the National Company Law Tribunal (NCLT) to facilitate the restitution process. The ED held meetings with the claimants and eventually provided a no-objection clearance to the Hon’ble Special Court, allowing the restitution of the seized assets to the affected banks.

After securing the ED’s approval, the Special Court ordered the properties to be handed over to the consortium of banks through the Official Liquidator under Section 8(7) of the PMLA, 2002. This move aims to help recover a portion of the funds lost due to the fraudulent activities of Surya Pharmaceuticals Ltd. and its promoters.

The ED’s action in this case is seen as a significant step toward protecting the interests of public sector banks. The Directorate has emphasized its commitment to supporting victims of financial fraud and recovering misappropriated assets. Meanwhile, the ED has confirmed that further investigations are ongoing to uncover more details related to this large-scale bank fraud.