New Delhi: The Enforcement Directorate (ED) on Thursday announced that it had arrested the managing director of a Hyderabad-based company last week in a money laundering case linked to an alleged fraud of Rs.3,316 crore in a consortium of public sector banks.
Vuppalapati Satish Kumar, the managing director of Prithvi Information Solutions Limited (PISL), was arrested on August 12 and a special tribunal under the Money Laundering Prevention Act (PMLA) sent him later to ten days of agency custody.
This is the second arrest in this case after his sister V Hima Bindu, the “main defendant” and general manager of a VMCSL-based telecommunications equipment manufacturing company, was arrested by the ED in Beginning of the month.
“Although V Satish Kumar has claimed that he has no connection with the non-performing assets (NPA) of VMCSL, more than 40 hard drives of this company were recovered from his home during the search carried out on July 20. . “
“During a forensic examination of the digital devices, it was found that he (Satish Kumar) had engaged in benami transactions and was involved in efforts to transfer fraudulent amounts to offshore entities.” the chief executive said in a statement here.
He was uncooperative during the investigation and did not provide documents from his own business entities under one pretext or another.
The ED money laundering case against VMCSL and its promoters is based on a previously filed CBI FIR against them.
“VMCSL had taken out loans from a consortium of banks and the current unpaid dues to all banks are Rs 3,316 crore.”
“The forensic audit revealed that VMCSL circulated loans to various related entities to inflate its books,” the ED alleged earlier.
He said the audit also found that his related entity PISL received a 3% commission by VMCSL for all BSNL receipts “without any specific role” from PISL in BSNL tenders.
“A forensic audit revealed that VMCSL had opened various letters of credit worth Rs 692 crore on behalf of bogus or fictitious entities which were then transferred,” he alleged.
Bindu, the ED had claimed, through his company VMCSL and with the “active help” of his brother V Satish Kumar, in order to dodge the banks, to have created false and exaggerated operating income by generating false sales and purchase invoices through companies controlled by their directors and family members.