MUMBAI: The Mumbai unit of the Enforcement Directorate (ED) has provisionally attached immovable properties worth ₹132.85 crore in connection with its money laundering probe into an alleged ₹1,438 crore bank fraud involving private firm Ushdev International Limited (UIL). The attached assets include land parcels and office areas in Mumbai and Raigad.
According to ED officials, UIL, a metal trading company, allegedly obtained loans and credit facilities from a consortium of banks led by the public sector State Bank of India (SBI) by submitting forged trade documents. The documents allegedly showed business transactions that did not actually take place, prompting banks to release funds.
The ED began its investigation after a First Information Report (FIR) was registered in July 2022 by the Mumbai unit of the Central Bureau of Investigation (CBI) against UIL, its two directors and unknown public servants. The case was filed following a complaint by the SBI-led bank consortium.
As per the FIR, the consortium had sanctioned credit facilities to UIL between April 2013 and March 2018. The loan accounts were declared non-performing assets (NPAs) on October 2, 2016. A forensic audit of transactions between April 2013 and May 2018 later flagged several irregularities.
UIL had gotten various types of credit facilities, including cash credit, Letters of Credit (LC) and buyers’ credit. An LC is a bank guarantee ensuring payment to a seller in a trade deal, while a buyers’ credit is a short-term loan offered to importers.
The ED’s probe revealed that funds received through LCs were routed to shell companies and supplier entities controlled by the accused, which acted only as intermediaries. The money was then moved through several entities and allegedly routed back to Ushdev Group companies through circular transactions without any commercial justification.
Investigators also found that a substantial portion of the cash credit funds was diverted to related entities under the guise of advances. Many of these firms were either inactive or not engaged in legitimate business. “The funds were ultimately routed to the Uttam Galva Group of companies, indicating layering and diversion of proceeds of crime”, an ED official said.
The probe further revealed that LC proceeds were used to repay buyers’ credit loans linked to imports that were later re-exported to related overseas entities. The export earnings were allegedly not brought back to India and were instead diverted to foreign subsidiaries and connected firms.
So far, the ED has provisionally attached properties worth ₹176.37 crore in the case.