ED files case against Era Infra CMD in a Rs-251 crore fund diversion case
Promoters of another company undergoing corporate insolvency resolution process have been found to be involved in diversion of bank loan. The Enforcement Directorate (ED) has filed prosecution complaint against Era Infra Engineering Limited (EIEL), its Chairman and Managing Director Hem Singh Bharana and two statuary auditors Pankaj Jain and Vandna Sharda under Prevention of Money-laundering Act (PMLA) 2002 in a bank fraud case.
The case relates to criminal conspiracy, cheating, forgery and use of forged documents and criminal misconduct carried out by Era Infra Engineering and other accused person(s) in the matter of sanction, disbursement and utilization of two term loans totaling Rs 650 crore.
The ED initiated investigations on the basis of an FIR registered by the Central Bureau of Investigation (CBI) against Era Infra, Hem Singh Bharana, CMD and others.
Money laundering investigation revealed that the sanctioned funds were disbursed and utilised in a manner defying the sanctioned purpose. The investigation found that Era Infra in active connivance with its CMD Hem Singh Bharana had diverted huge amount of funds of Rs 251 crore, which was sourced from illegally diverted fund out of loans taken by the company from UCO Bank. This amount of Rs 251 crore was further used and projected as untainted in business expenses and other transactions by the company.
Out of Rs 450 Crore disbursed by UCO Bank, an amount of Rs 236 crore was utilized for purposes beyond the purview of the sanctioned terms.
Further an amount of Rs 14.70 Crore was diverted from another sanctioned loan Rs 200 Crore and thus the total amount diverted by EIEL comes to Rs. 251 Crore. Out of the total Proceeds of crime of Rs 251 Crore, assets valued to Rs. 58.66 crore have already been attached by ED and subsequently confirmed by PMLA Adjudicating Authority.
Era Infra was one of the 12 large loan default cases referred by the Reserve Bank of India to the National Company Law Tribunal (NCLT) for resolution under the then newly enforced Insolvency and Bankruptcy Code (IBC) in 2017.
It is almost four years since the NCLT admitted Era Infra insolvency case and yet there is no resolution at sight in this case.
