ED arrests man in money laundering case involving Rs 750 crores
Oct 31, 2020
New Delhi [India], October 31 : The Enforcement Directorate (ED) has arrested Sai Chandrasekhar for his involvement in the offence of money laundering under Prevention of Money Laundering Act (PMLA) 2002 involving Rs 750 crores.
The accused was produced before a Saket District and Sessions Court in New Delhi and send to seven-day remand of the ED for his custodial interrogation. Earlier, a search was also conducted at the residential and office premises of Sai Chandrasekhar on October 23.
The economic offences watchdog had initiated an investigation under PMLA against Virkaran Awasty, Vinod Sirohi, KPMG India Pvt Ltd and others based on FIR registered by Economic Offence Wing, Delhi Police under various sections of the Indian Penal Code (IPC) including cheating and criminal conspiracy on the basis of a complaint.
"Hassad Netherlands BV, a subsidiary of Hassad Food Company, was induced by Virkaran Awasty and Ritika Awasty, Directors of Bush Foods Overseas Pvt Ltd to part with funds amounting to USD 120 million (approximately Rs 750 crores) by misrepresenting the level of stocks or inventory," the ED said in a statement on Saturday.
It said on the basis of such misrepresentations the accused persons induced Hassad Netherlands BV to provide a corporate guarantee for the outstanding amount of Rs 714 crores of credit facilities availed from the consortium of banks.
"Investigation under PMLA revealed that Virkaran Awasty along with other directors created bogus stocks by inflating the inventory and fabricating financial statements of the company. Bulk transactions of sales and purchases were generated in order that Bush Foods could record increased turnover, profit margins and additional stock by generating approximately equal value of sales and purchases in a year," the statement said.
"Artificial profit and artificial stock in the book value of inventory was recorded in the books by showing these bulk sales as domestic sales. Accused Sai Chandrasekhar was an employee of Hassad Foods Company and was part of the team which evaluated the transactions. Sai Chandrasekhar colluded and conspired with Virkaran Awasty to cheat Hassad Netherlands. He had a pivotal role and responsibility in the business transactions between Bush Foods Overseas Pvt Ltd and Hassad Netherlands BV," it added.
The ED said he also had a key role in negotiations, discussion and due diligence carried out by Hassad on Bush Foods and alleged that in lieu of manipulating the due diligence exercise in favour of Bush Foods Pvt Ltd and knowing that the credentials of the company were not genuine and facilitating the transactions, Chandrasekhar was paid illegal gratification by Virkaran Awasty to the tune of Rs 20.79 crores.
"The investigation also revealed that Chandrasekhar acquired property located at Indiranagar, Bangalore worth Rs 5.8 crore, for which amount was transferred by Virkaran Awasty from his concern V&R Overseas. Sai Chandrasekhar also received 'Proceeds of crime' to the tune of Rs 1 crore in the account of his father and mother from Virkaran Awasty, which was spent for medical treatment of his father," the statement said.
It said Chandrasekhar further received Rs 13.79 crores from Virkaran Awasty in his company Harin Ventures Limited, Dubai. "Assets identified so far of Chandrashekhar located in Bangalore and Mumbai and movable assets in the form of balances in bank accounts totalling to Rs 7 crore have already been attached under PMLA," ED said.
