Probe Agency Restitutes Rs 380-Crore Assets In Bank 'Fraud' Involving Ex-MLA
Attached assets worth Rs 380 crore have been restored to a designated Maharashtra government authority for distribution to the about 5 lakh "duped" depositors of a cooperative bank, controlled by a former MLA, as part of a money laundering proceeding, the Enforcement Directorate said on Wednesday.
The case pertains to the Karnala Nagari Sahakari Bank Ltd. in Panvel where it was alleged that its erstwhile chairman, Vivekanand Shankar Patil, in connivance with other officials of the bank, "cheated" the lender and "siphoned off" the funds for private investments.
Patil, a four-time MLA of the Shetkari Kamgar Paksha Party, was arrested by the ED in June 2021.
The money laundering case of the ED stems from a February 2020 FIR filed by the Pune Police Economic Offences Wing (EOW).
The police alleged in its chargesheet that the then chairman Patil and other officials of the bank prepared 63 "bogus" loan accounts using "forged" documents without following the RBI guidelines and standard banking norms, and "siphoned off" Rs 560 crore for personal gains, the federal probe agency said in a statement.
The ED said its probe found that funds were "diverted" to various entities "controlled" by Patil and his relatives.
"He (Patil) purchased various properties and assets using the funds siphoned off from the bank and these proceeds of crime were utilised for the purchase of immovable properties at different locations in Raigad district of Maharashtra," it said.
These assets, worth Rs 386 crore, were attached by the ED under two provisional orders issued in 2021 and 2023. The ED also filed a chargesheet in August 2021 before a special PMLA court in Mumbai.
The ED said the liquidator appointed by the RBI for the bank filed an application, under section 8(8) of the PMLA, before the court seeking restitution of assets.
The ED gave its consent, the agency said.
The court issued an order on July 22 directing the release of the property -- Karnala Sports Academy at Panvel -- to the liquidator and to put it up for auction, the ED said.
The court also ordered the Competent Authority (Maharashtra Protection of Interest of Depositors) to "realise" the land at Posari, Raigad by auction for distribution amongst the depositors.
"The bank had more than 5 lakh depositors having total deposits of Rs 553 crore, and they lost their hard-earned money.
"In the larger interest of depositors and currently ongoing restitution efforts, ED took steps to expedite the process resulting in the restitution," the agency said.
The PMLA provides for the process of restitution even before completion of the court trial in order to provide succour to the victims of frauds like bank loans and Ponzi scheme cheating.
The fraud came to light after an audit was done at the instance of the Reserve Bank of India during 2019-20, when it was found that Patil was siphoning off funds from the bank through 67 "fictitious" loan accounts.
The funds were sent to the loan accounts of entities/firms/trusts owned or controlled by Patil including Karnala Charitable Trust, Karnala Sports Academy and Karnala Mahila Readymade Garments Cooperative Society Limited, the agency had claimed in a statement issued in October 2023.
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