Bank Fraud: ED Arrests Four In Money Laundering Case Against Chennai's Surana Group

The ED found money was generated by these Singapore-based companies through the sale of goods exported by Indian entities and they wrote off the receivables in the books of accounts.

New Delhi: The Enforcement Directorate on Thursday said it has arrested four people, including two promoters of Chennai-based Surana group, in a money laundering case linked to a reported Rs 3,986 crore worth bank loan fraud.

Dinesh Chand Surana and Vijay Raj Surana, both managing directors cum promoters of Surana Industries Limited, Surana Power Ltd and Surana Corporation Ltd and P Anand and I Prabhakaran, dummy directors of shell companies, were taken into custody on July 12.

The four have been sent to the Enforcement Directorate (ED) remand till July 27 by a special Prevention of Money Laundering Act (PMLA) court in Chennai, the federal probe agency said in a statement.

The money laundering probe stems from three CBI FIRs filed against the accused in 2020 that alleged that these three companies, along with their promoters, directors and unknown individuals indulged in misappropriation and criminal breach of trust, manipulation of books of accounts through fictitious entities and routing of funds through shell (dummy) companies.

The CBI complaint charged that the accused siphoned off funds from the company's accounts for their personal gains causing loss to the tune of Rs 3,986 crore to the public sector banks.

The Surana group is into manufacturing and sale of gold jewellery.

The ED alleged the accused "created a web of shell companies and the dummy directors of these shell companies were either relatives/persons from ancestral village of Surana family or the employees of Surana group of companies." "The transactions of the three main group companies were routed through those dummy/shell companies and thereafter the monies were siphoned off to other purposes including purchasing properties through layering and also obtained benami properties in the name of those shell companies," the agency alleged.

Surana group of companies/promoters incorporated several companies in Cayman Islands as well as British Virgin Islands in the name of "dummy" directors and siphoned off money to park in those companies through four "dummy" companies located in Singapore, it said.

The ED found money was generated by these Singapore-based companies through the sale of goods exported by Indian entities.

"However, these Indian entities have subsequently written off the receivables in the books of accounts in India," it claimed.

The ED alleged "crores of rupees have been transferred from these three main group companies to the shell companies and from the said shell companies to the personal accounts of promoters and their wives." It said Dinesh Chand Surana is the "main perpetrator of this money-laundering scheme and all the shell companies were under his active control." "Vijay Raj Surana aided in the transactions with the shell companies which were nothing but manipulation of accounts and also allowed the transactions to continue including layering etc.," it said.

Describing the alleged role of Anand and Prabhakaran, it said, they "actively connived" with the Surana management in siphoning off funds and "thus aided and abetted them in their activities of siphoning and laundering of public funds."