The Enforcement Directorate (ED) Saturday conducted searches at nine locations in Tamil Nadu in connection with an alleged Rs 900 million bank loan fraud money laundering case, officials said.
Searches are being conducted at Virudhunagar, Madurai and Coimbatore in connection with its probe involving Ms Inshumathi Refineries Pvt Ltd (which is based in Virudhunagar district of the state), they said, adding a criminal case under the Prevention of Money Laundering Act (PMLA) has been filed.
The company is managed by R Shenbagan and others. Residential and business premises linked to him are being raided, officials said.
"IRPL was enjoying cash credit facilities, Letter of Credit (LOC) facilities and term loan from State Bank of India's overseas branch in Chennai.
"It had availed a total of 46 LOCs from the SBI which were issued against bogus firms/fake invoices for a value of around Rs 873.6 million which was devolved on the bank later due to insufficient funds in their account and also diverted the business proceeds which resulted into a pecuniary loss of around Rs 90o million to SBI," the ED said in its complaint.
The ED has filed its PMLA case against the firm based on a CBI FIR and charge sheet against R Shenbagan and others.