New Delhi, Jun 18 (IANS) The Enforcement Directorate (ED) has intensified its crackdown on financial irregularities by conducting search operations at 17 locations in Mumbai and Delhi under the Prevention of Money Laundering Act (PMLA), 2002, ED officials said on Thursday.

The raids targeted entities linked to a major loan diversion case involving Housing Development and Infrastructure Limited (HDIL) and associated companies.

The premises searched included the offices of Suraksha Asset Reconstruction Company Limited (SARCL), Suraksha Realty Limited, Khyati Realtors Private Limited, and other connected persons, the ED said in a statement.

The ED initiated the investigation based on an FIR registered by the Central Bureau of Investigation (CBI) and Anti-Corruption Bureau (ACB) against HDIL and others for allegedly illegally obtaining loans amounting to Rs 200 crore and its diversion, the ED statement added.

According to the official press statement issued by the ED, the investigation has revealed serious irregularities.

Rakesh Kumar Wadhawan and Sarang Wadhawan, promoters of HDIL, allegedly conspired with Rana Kapoor, former Managing Director and Chief Executive Officer of Yes Bank, to fraudulently obtain six term loans totalling nearly Rs 200.30 crore in the name of Mack Star Marketing Private Limited (MSPL) during 2011-16.

The loan amount was allegedly diverted towards the repayment of liabilities of HDIL group entities instead of being used for its sanctioned purpose, the central probe agency said.

Further probes uncovered that several properties of MSPL were allegedly alienated to associates of the accused.

The investigation also revealed that Rana Kapoor facilitated the diversion of MSPL loan proceeds towards HDIL liabilities, leading to premature assignment of the loan account to Suraksha ARC during FY 2017-18, which resulted in the “evergreening” of bad debt.

It has also come to light that Suraksha ARC acquired a substantial portion of stressed assets assigned by Yes Bank, including the MSPL loan account.

Simultaneously, credit facilities were extended by Yes Bank to various Valla Group entities, with suspicions that such funds were utilised, directly or indirectly, towards meeting cash margin requirements for the acquisition of these loan accounts by Suraksha ARC.

Certain other illegalities were also noticed.

During the searches, the ED seized cash amounting to Rs 50 lakh, 10 kg silver bars, bank lockers, and several incriminating materials/digital devices.

The agency also uncovered a series of circular transactions within group entities, inter alia involving Yes Bank loans, camouflaged as cash margin payments by ARC for liquidity and interest-neutral acquisition of stressed assets.

The ED said that further investigation is underway.

–IANS

sktr/khz