The Enforcement Directorate (ED) has arrested an accused in an economic offence case involving about ₹750 crore. The agency has secured his seven-day custody from a special court.
The accused has been identified as Sai Chandrasekhar. The ED earlier conducted searches on his premises on October 23.
The money laundering probe is based on an FIR registered by the Economic Offences Wing of the Delhi Police against Virkaran Awasty, Vinod Sirohi, KPMG India Private Limited and others, following a complaint from Hassad Netherlands B V. The police have also filed a charge sheet, said the agency.
It is alleged that Hassad Netherlands B V, a subsidiary of Hassad Food Company, was induced by Mr. Awasty and Ritika Awasty, directors of Bush Foods Overseas Private Limited, into parting with funds amounting to $120 million (about ₹750 crore) by misrepresenting its level of stocks/inventory.
The accused persons made Hassad Netherlands B V provide a corporate guarantee for an outstanding amount of ₹714 crore towards a consortium of banks. The credit facilities were secured by Bush Foods Overseas Private Limited based on non-existent stocks and inventory, the agency alleges.
According to the ED, Mr. Awasty and other directors created bogus stocks by inflating the inventory and fabricating the company’s financial statements. Bulk transactions of sales and purchases were generated so that Bush Foods could project increased turnover, profit margins and additional stock.
Mr. Chandrasekhar, as an employee of Hassad Foods Company, was part of the team that evaluated the transactions. He played a key role in the negotiations and carrying out the due diligence exercise.
The ED has alleged that he conspired with Mr. Awasty to cheat Hassad Netherlands and, in lieu of the favour, received ₹20.79 crore from Mr. Awasty.
Mr. Chandrasekhar acquired property worth ₹5.8 crore in Bengaluru’s Indiranagar, for which the money was transferred by Mr. Awasty from his concern, V&R Overseas. The accused also received ₹1 crore in the account of his parents, which was spent on his father’s medical treatment. He then received ₹13.79 crore in his company, Harin Ventures Limited (Dubai), the agency said.
Property worth ₹7 crore, linked to Mr. Chandrasekhar, has so far been attached by the ED.