The Enforcement Directorate has attached assets worth ₹517.81 crore of SKS Ispat & Power Ltd in the form of land, building, plant and machinery, in connection with an alleged bank fraud case of ₹895.45 crore involving Cethar Ltd.
The ED probe is based on a First Information Report (FIR) registered by the Central Bureau of Investigation (CBI) against Cethar Ltd, a boiler manufacturing company based in Trichy, Tamil Nadu. The company had taken credit facilities from a consortium of lenders, led by a Madurai branch of the Indian Bank. The loan accounts turned non-performing assets on December 31, 2012.
The matter got referred to the National Company Law Tribunal (NCLT), Chennai, in 2017. The ED initiated the probe in 2019 and conducted searches on the premises of those linked to the case. Immovable property and jewellery worth ₹9.08 crore were attached in 2022 and the decision was confirmed by the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA).
The ED alleged that ₹565 crore had been kept off the books and ₹228 crore was written off as a loss on the sale of investments.
The agency found that in order to bag an Engineering, Procurement, and Construction contract of SKS Power Generation (Chhattisgarh) Ltd for about ₹3,500 crore, Cethar Ltd had allegedly siphoned off ₹228 crore to its parent company SKS Ispat & Power Ltd under the guise of investment in its shares. However, the interest accruing at the rate of compounding 12% per annum was kept off books.
“This money was accounted as Trade Receivables until 2016-17 when it was written off as a loss on the sale of investments by creating backdated/forged agreements. This was done just two days prior to the commencement of NCLT proceeding...,” said the agency in a statement on Wednesday.
“Thus, K. Subburaj, director of Cethar Ltd. colluded with Anil Gupta, chairman-cum-managing director of SKS Ispat & Power Ltd. with the criminal intent to siphon off assets of ₹793 crore from the books of Cethar, which turned insolvent...,” it alleged, adding that a complex scheme of agreements and transactions had been created to conceal the “proceeds of crime” of ₹793 crore.
The funds were allegedly parked at SKS Ispat & Power Ltd, which used the money for its regular business purposes, alleged the ED.
