Investigation has revealed that the firm conducted “circuitous transactions of huge amounts with various parties.
Mumbai: The Enforcement Directorate (ED) has attached immovable properties worth Rs 1,122 crore in its Prevention of Money Laundering Act (PMLA) probe against the Vadodara-based private firm, Diamond Power Infrastructure Private Limited, which is facing a CBI probe related to alleged default on credits worth Rs 2,654.4 crore to a consortium of banks. The attached properties include plants, machinery, building and land, three windmills in Bhuj, residential bungalows /flats, an under-construction hotel and other land parcels in Vadodara, ED sources said.
Investigation by ED has revealed that the firm allegedly conducted "circuitous transactions of huge amounts with various parties, including its related parties by issuing fake invoices without any actual sale/purchase of goods," said a source.
According to the source, the transactions were done allegedly with the dual intention of availing CENVAT credit --- a scheme where the manufacturers are allowed a set off of the taxes paid on the input services used while manufacturing the final products --- fraudulently as well as projecting increased turnover before the banks in their financial records.
The agency has also accused the firm of accessing funds fraudulently to the tune of Rs 261 crore by manipulating the facility of Letter of Credit from the banks. According to the agency, the firm allegedly showed "fake/fictitious entries of receivables in their books of accounts of around Rs 1000 crores from their debtors".
"On the basis of such books of account, the firm is continuing to get credit from the banks. The investigation found that most of these figures are exaggerated," the source said.
Further, the agency is verifying leads that the firm allegedly diverted "huge amount of funds received as loan/cash credit to its real estate companies," the source said. The agency suspects that there was "little genuine business activity" done by the Diamond group of companies.