HYDERABAD: The Enforcement Directorate (ED) has arrested Balvinder Singh the Promoter - Director of the PCH Corporation Ltd and other PCH group companies under the Prevention of Money Laundering Act (PMLA) in a case relating to defrauding banks to the tune of Rs 370 crore.
Balvinder Singh was arrested on Tuesday. He was produced before a Special Court in Hyderabad on Wednesday, which remanded him to judicial custody till February 23.
Earlier the CBI in Chennai had lodged a case against him and others under various sections of the IPC. The federal probe agency had also submitted a charge sheet in this connection before a Special Court. The ED also initiated a money laundering probe on the basis of the CBI's FIR and charge sheet.
In the CBI charge sheet it had been alleged that PCH Agencies Pvt Ltd, PCH Lifestyle Pvt Ltd, and Balvinder Singh and others had caused wrongful loss to Punjab and Sind Bank, George Town branch, Chennai, by fraudulently availing credit facilities by submitting fabricated documents to show higher turnover.
The accused after availing the loan diverted it to other entities. "Subsequently, two more FIRs were registered by the CBI, BS&FB, Bengaluru and CBI Chennai against the PCH Group companies, " said an ED official.
The ED has learnt in its investigation that the PCH group companies had availed loans from various public sector and private banks and failed to repay the said loans.
The amounts received as loan was diverted through shell companies with the help of Chartered Accounts (CAs) and Entry-operators in Hyderabad and Mumbai and the amount received in the PCH group companies for the purpose of showing a false rosy picture about the financial health of PCH Group, for the purpose of availing more loans and also for the purpose of an intended IPO.
Part of these diverted amounts was also received in the personal account of Balvinder Singh and his family members and relatives.
"Investigation conducted so far has revealed that Balvinder Singh had received amounts totaling to Rs 53.97 crore from various shell entities which had no genuine business activity, but were used only for the purpose of rotation of the funds and these amounts were projected by Balvinder Singh as 'unsecured' loans, " said the ED official.
The ED said that the source of these funds was nothing but the siphoned off loan. This amount was utilised by the accused to purchase properties in the names of his companies as well as in personal names which were later mortgaged to the banks for availing more credit facilities. These unsecured loans have not been repaid till date.
The ED official said that further investigation in the matter was on.