ED Conducts Raids in Rs 4,957 Crore Bank Loan Fraud Case Involving Pratibha Industries

On Thursday, the Enforcement Directorate (ED) conducted raids at 14 locations across Mumbai and Delhi as part of its investigation into a money laundering case involving Pratibha Industries Ltd. and its promoter, Ajit Kulkarni. The investigation concerns a bank loan fraud amounting to Rs 4,957 crore. During the raids, the ED froze bank accounts and mutual fund investments worth Rs 5.4 crore.

The probe was launched after the Central Bureau of Investigation (CBI) filed a First Information Report (FIR) against Pratibha Industries Ltd., Ajit Kulkarni, and others two years ago. The case stemmed from a complaint filed by the Bank of Baroda, which accused the company of defrauding a banking consortium.

According to the ED, Pratibha Industries and its directors allegedly orchestrated a scheme to cause financial losses to the banks while unlawfully enriching themselves through fraudulent transactions and circular trading. The investigation uncovered that the company’s promoters used various accommodation entry providers to layer funds through the bank accounts of fictitious entities. Suspicious third-party transactions were conducted to divert funds into different companies for the purchase of immovable properties.

The CBI’s FIR, filed in 2023, revealed that Pratibha Industries had engaged in trading activities involving steel plates, TMT bars, MS pipes, and steel rods with several companies. The company’s records showed purchase transactions worth Rs 3,935 crore and sales transactions of Rs 4,103 crore for various goods. However, Pratibha Industries failed to provide the necessary documentation to auditors appointed by the bank to verify the actual movement of goods.

The ED’s investigation continues, with authorities focusing on the financial irregularities and attempts to recover the defrauded funds.