Why did ED raid Mahesh Cooperative Urban bank?

Hyderabad: Sleuths of the Enforcement Directorate raided AP Mahesh Cooperative Urban Bank Ltd on July 31 and seized cash amounting to Rs 1 crore, jewellery worth Rs 4.27 crores, foreign currency USD 6,256, property documents, bank locker keys, incriminating documents and digital devices.

The ED initiated investigation on the basis of various FIRs registered by Banjara Hills PS against Ramesh Kumar Bung, chairman of AP Mahesh Co-operative Urban Bank, Umesh Chand Asawa, Puroshatamdas Mandhana and others for disbursing loans of more than Rs 300 crores to various persons and entities against illegal collaterals such as Wakf Board lands and non-existent properties by charging a commission of up to 10 per cent from the loanees for disbursement of such illegal loans.

The FIRs also alleged siphoning off Rs 18.30 crores in the construction of the head office building of the bank; siphoning off Rs 6.5 crores through false bills; disbursal of gold loans to 1,800 dummy persons and entities through fraudulent means, enrolling them as members and getting votes cast in their favour whereas such gold loanees were ineligible for voting.

ED investigation revealed large-scale irregularities in the sanction of loans, operation of the loan accounts and their closure.

Suspicious transactions

Properties were found to be acquired by the accused and their family members at values significantly lower than the prevailing market rates and in some instances, at rates lower than the valuation arrived at by the bank at the time of sanction of the loans in the past. The investigation also revealed suspicious transactions between loanees and the accused and their family members.

Routing of loan funds back to the accused and their family members from the loanees accounts was revealed. In several cases, properties of loanees were found to have been acquired by the accused and their family members at rates much below their actual values. Properties pledged as collateral securities were also found to be acquired by the accused and their family members at very low rates.

In addition to the main accused, searches were also conducted at the premises of their accomplices who were identified during the investigation and are suspected to be involved in the offence of money laundering.