ED searches Bengal premises in Rs 290-crore Jharkhand power plant loan fraud case

The Enforcement Directorate (ED) carried out searches at several locations in West Bengal on Friday, October 30, in a money-laundering investigation into a bank loan of about Rs 290 crore taken for a power plant in Jharkhand, according to reports by UNI and ETV Bharat.

Investigators suspect the money, borrowed from a consortium of banks for a 66-megawatt plant, was never spent on the project and was instead moved through a network of shell companies, ETV Bharat reported, citing officials. ETV Bharat and Indian Opinion named the borrower as Kohinoor Power Private Limited. The company has not commented publicly, and no arrests have been reported.

Where the searches took place

Teams began the searches on Friday morning, with central armed forces personnel guarding the premises, ETV Bharat reported. UNI, citing ED sources, said searches were carried out in Kolkata, Howrah, Hooghly, Durgapur and Asansol. ETV Bharat reported searches at a flat in a residential complex in the Lake Town area of Kolkata, near VIP Road, and at a house in Uttarpara in Hooghly district. Investigators examined computers, bank records and financial documents, it said.

The homes of two chartered accountants were among the premises searched, according to ETV Bharat and Indian Opinion. Officials told ETV Bharat they were examining the role the accountants may have played. One of them, speaking to reporters while the search was on, said the matter had "nothing to do with corruption" and that he was cooperating with investigators.

Reports differ on the scale of the operation. Indian Opinion said four locations were searched and put the alleged fraud at Rs 280 crore; it also cited a report in The Hindu that eight premises were searched under the Prevention of Money Laundering Act (PMLA). UNI and ETV Bharat gave the amount as about Rs 290 crore and did not give a number of premises. No official ED statement on Friday's searches had been reported by Friday evening.

Background

This is not the first round of searches in the case. On September 3, the ED searched 11 premises in Kolkata linked to the same Rs 290-crore loan for a 66 MW Jharkhand power plant, news agency IANS reported at the time. The agency said then that the loans had been diverted to other group entities and for personal use, and that the company had gone through insolvency proceedings before the National Company Law Tribunal, in which only about Rs 7 crore was recovered.

Indian Opinion, citing The Hindu, reported that the case originated in a complaint by the Serious Fraud Investigation Office and that investigators are looking at possible misuse of the insolvency process. The Declaration has not been able to confirm this independently.

What happens next

Under the PMLA, the ED can summon people for questioning and attach assets it believes are proceeds of crime. Investigators are expected to examine the documents and devices taken in Friday's searches. None of the people whose premises were searched has been charged.