Karnataka: ED attaches Rs 255 cr worth assets in Kanva deposit fraud | Bengaluru News

by karwar

BENGALURU: The Directorate of Enforcement (ED) has attached assets worth Rs 255.17 crore belonging to N Nanjundaiah, founder of Kanva Group of Companies and other entities and his family members.
The assets have been attached under Prevention of Money Laundering Act (PMLA) 2002 and they are in the form of immovable properties in Karnataka (agriculture and non-agriculture land and buildings and resorts) and movable properties in the form of balances in bank accounts in the name of Nanjundaiah and his family members, Kanva Group of Companies and other entities.
Investigation under the provisions of the PMLA was initiated subsequent to the complaint received from the Office of the Registrar Cooperative Societies, Bengaluru and FIRs registered by Basaveshwara Police Station, Vijaynagar Sub-Division, Bengaluru City against N Nanjundaiah, Sree Kanva Souhardha Co-Operative Credit Limited (SKSCCL), Bengaluru City, Karnataka on allegations that they have collected Rs. 650 crore s deposits from public, assuring high rate of interest and through commission agents, without maintaining required liquidity.
The accused advanced loans out of deposits, working capitals and shares reserves without getting any security and not following existing rules and regulations.
Searches under PMLA were conducted in the premises of Nanjundaiah and other directors of SKSCCL and Kanva group of companies which resulted in seizure of incriminating documents. Nanjundaiah was arrested on August 25.
Investigation conducted under PMLA so far has revealed that Nanjundaiah, founder/ common Director of Sree KanvaSouhardha Co-operative Credit Limited and Kanva Group of companies collected Rs. 650 crore through unauthorized collection centers and agents from about 13000 gullible investors by luring with a high 12% to 15% interest. The accused manipulated SKSCCL accounts and suppressed the actual financial position of the society that it was under loss and projected that it was makinig profits.
According to ED, huge amounts were spent illegally on collection agents and collection centers and Kanva group of company’s staff salary and other perks. They maintained very low liquidity in the SKSCCL accounts. They made dubious entries wherever required in the cloud-based Zenith Software and edited and submitted the window dressed report to authorities. From the collected amount more than Rs 400 Crores was directly and indirectly swindled and diverted, advanced as loans without any surety to Kanva group of companies owned by Nanjundaiah, which is still pending. Nanjundaiah availed loans to the extent of Rs 120 crore from various Banks and financial institutions, which are also outstanding.
ED said that investigations further revealed that the unauthorizedly collected money was embezzled and transferred to various accounts of Kanva group of entities, the accused and his family members’ accounts and other persons related to the KSCCL. From the siphoned off money, the accused had acquired more than 160 immovable properties and movable properties in his name and that of his his family members and entities owned by him. Some of the properties were sold to further the layering of embezzled money.

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