How two Hyd-based businessmen helped companies defraud banks of crores
Both the accused admitted that they provide these services for pecuniary gain of 0.25% of the transaction amount
By Newsmeter Network Published on 2 July 2022 6:17 PM IST
Hyderabad: The Directorate of Enforcement (ED) arrested Khagesh Kachhwal and Varanasi Dileef on 25 June in a money laundering case. They acted as entry operators and facilitated large-scale bogus LC discounting and provided large accommodation entries to assist the money laundering activities of people accused of bank fraud, the ED said. ED initiated a money-laundering investigation on the basis of an FIR registered by the CBI, EOB, Chennai, against RE Cables & Conductors Pvt. Ltd. (RECC) and others for alleged misappropriation of SBI funds and causing wrongful loss to the tune of Rs. 74.83 crores.
The investigation revealed that Khagesh Kachhwal and Varanasi Dileef are one of the biggest entry providers in Hyderabad under whose assistance and guidance RECC fraudulently mis-utilised the credit facilities availed from banks. Khagesh Kachhwal and Varanasi Dileef have a number of shell entities under their control.
RECC opened various LCs in the name of shell entities controlled by Khagesh and Varanasi under the guise of short-term advance with the help of bogus documents. No goods/materials are supplied against such LCs. Subsequently, the LCs were discounted with a known bank and the amount received by discounting was diverted to RECC so that it can tide over its cash flow crunch. Since RECC did not make the payments to the bank, the LCs devolved causing loss to the bank. Both the accused admitted that they provide these services for pecuniary gain of 0.25% of the transaction amount. Apart from RECC, they have provided such services to many business houses in Hyderabad, including businesses that are now accused of large loan frauds like Golden Jubilee Hotels, VNR Infra Pvt. Ltd., and Transstroy India Ltd. Their business of bogus entries is running into several hundreds of crores worth of transactions.
Khagesh and Varanasi were arrested and produced before the special PMLA court on 25 June and the court has granted eight days ED custody to the accused.
