New Delhi, Sep 25 (UNI) Enforcement Directorate (ED) on Friday said that it has issued a Provisional Attachment Order under the provisions of the Prevention of Money Laundering Act (PMLA) attaching assets worth Rs 255.17 crore in a case related to cheating of investors in ponzi scheme.
The attached assets, consist of agriculture and non-agriculture land, buildings, resorts and movable properties in the form of balances in bank accounts in the name of N Nanjundaiah and his family members of Kanva Group of Companies and other entities.
Investigation under the provisions of the PMLA was initiated subsequent to the complaint received from the Office of Registrar Cooperative Societies, Bangalore and FIRs registered by Basaveshwara Police Station in Bengaluru City against N Nanjundaiah, Sree Kanva Souhardha Co-Operative Credit Limited (SKSCCL), Benagluru City, Karnataka under section 420 of IPC, 1860 on allegations that they have collected Rs 650 crore deposits from the members and public, assuring high rate of interest through commission agents, without maintaining required liquidity.
The accused advanced loans out of deposits, working capitals, shares reserves without getting any security and not following existing rules and regulations.
Searches under PMLA were also conducted in the premises of the accused N Nanjundaiah and other Directors of the Sree Kanva Souhardha Co-operative Credit Limited (SKSCCL) and Kanva group of companies which resulted in seizure of incriminating documents.
Following the raids, N Nanjundaiah was arrested on August 25 under PMLA and Special Judge for CBI and PMLA cases at Bengaluru initially granted Enforcement Custody of N Nanjundaiah for seven days and now the accused is in judicial custody.
ED investigation conducted under PMLA so far has revealed that Nanjundaiah collected Rs 650 crore through unauthorized collection centers and collection agents from about 13,000 gullible investors by luring them to pay higher rate of interest.
The accused manipulated SKSCCL accounts and suppressed the actual financial position of the society, which was under loss whereas it was projected as profit. The accused indulged in collection of further deposits and not followed the due procedure while extending the loans, thereby making recovery close to impossible.
“Huge amount was spent illegally on collection agents and collection centers and Kanva group of company’s staff salary and other perks whereas they maintained very low liquidity in the SKSCCL accounts’, the ED officials revealed.
They made dubious entries wherever required in the cloud based Zenith Software and edited and submitted the window dressed report to authorities. SKSCCL has deliberately violated the Souhardha Sahakari Act/rules/bye-law and circulations and failed to practice the finance rules and regulations and collected huge money from the public at large.
From the collected amount more than Rs 400 crore was directly and indirectly swindled and diverted, advanced as loans without any surety to Kanva group of companies owned by N Nanjundaiah, which is still pending. N Nanjundaiah himself availed loans to the extent of 120 crore from various banks and financial institutions, which are also outstanding, the agency officials said.
Investigation further revealed that unauthorizedly collected money was embezzled and transferred to various accounts of Kanva group of entities, accused and his family members’ accounts and other persons related to the KSCCL.
From the siphoned money, the accused had acquired more than 160 immovable properties and movable properties in his name and in his family members and entities owned by him.