In further jolt to Era Infra insolvency case, ED freezes Co’s Axis Bank account
In what could further delay the Era Infra Engineering insolvency case, the Enforcement Directorate (ED) has attached movable asset worth Rs 19.22 crore of the company which has been under insolvency proceedings for over three years now.
The attachment under the Prevention of Money Laundering Act, 2002 (PMLA) has been done in relation to a bank fraud case involving Rs 650 crore. The attached asset is in the form of balance lying in a bank account of Era Infra maintained with Axis Bank.
ED initiated investigations under PMLA on the basis of FIR filed by the Central Bureau of Investigation (CBI) in April 2018 against Era Infra Engineering, its CMD Hem Singh Bharana, other unknown public servants of the bank/unknown private persons for the offence of criminal conspiracy, cheating, forgery and use of forged documents and criminal misconduct.
Investigations under PMLA revealed that the sanctioned loan amounts were disbursed and utilized in a manner defying the sanctioned purpose. Out of Rs 450 Crore disbursed by UCO Bank, an amount of Rs. 211 crore and Rs 25 crore were utilized for purposes beyond the purview of the sanctioned terms. The total amount diverted by Era Infra comes to Rs 236 Crore out of the term loan of Rs 450 Crore. An amount of Rs 14.7 crore was also diverted from the sanctioned amount of Rs 200 crore, taking the total diversion amount to Rs 250.7 Crore, which qualifies as ‘Proceeds of Crime’ in this case.
The ED had already provisionally attached assets valued at Rs 5.72 crore and Rs. 33.71 crore earlier. Now with this attachment of Rs. 19.22 crores, the total value of attached assets so far is Rs. 58.65 crores.
Era Infra is among the 12 large loan defaulters, which together accounted for Rs 3.5 lakh crore of outstanding claims from creditors and were referred to the National Company Law Tribunal (NCLT) by the Reserve Bank of India for resolution under the then newly enforced Insolvency and Bankruptcy Code (IBC).
It has been three years since then, and of the 12 cases, 10 have seen closures – nine of them getting resolved and two going into liquidation. Era Infra Engineering is the only case which is yet to see any closure.
