Investigations into a mega bank fraud exceeding ₹6,200 crore have exposed a carefully orchestrated financial conspiracy in which dozens of shell companies, fictitious transactions, and paper-only operations were used to mislead the banking system. According to the Enforcement Directorate (ED), Kolkata-based businessman Sanjay Sureka created a network of nearly 60 shell companies, projected a fictional turnover running into thousands of crores in the iron and steel sector, and secured massive loans from a consortium of government-owned banks.
The ED alleges that S K Goel, who served as Chairman and Managing Director of UCO Bank between 2007 and 2010, played the role of an active accomplice in the scam. Investigators claim that, in return for facilitating loans, properties were purchased in the names of shell companies as alleged quid pro quo, with ownership later transferred to members of Goel’s family.
A thriving business on paper, zero activity on the ground
The ED investigation identifies Concast Steel & Power Ltd (CSPL) as the epicentre of the fraud. Once projected as a flagship iron and steel group with plants across West Bengal, Odisha, and Andhra Pradesh, CSPL was taken over by Sureka in 2008. Thereafter, the company allegedly relied on fake sales, purchases, and transport documents to project rapid growth, high production, and strong sales volumes—none of which existed in reality.
Investigators found that drivers, housekeeping staff, office boys, and junior employees were appointed as directors of shell companies. By showing circular transactions among these entities, an artificial web of sales and purchases was created, making the company’s working capital requirements appear abnormally high and justifying continuous bank lending.
99% transactions were book entries, not real money
According to the ED, over 99% of the transactions carried out over several years were mere book adjustments. There was no real cash flow, no genuine movement of goods, and no legitimate commercial activity. Forged invoices, manipulated ledger entries, and fake transport receipts were used to show trucks ferrying iron and steel products between factories and shell firms—although no truck ever moved and no goods were delivered.
By 2017, the deception had reached its peak. The agency says CSPL effectively sold goods to itself, booking revenues only on paper. A similar pattern was found in raw material purchases, a large portion of which was shown from related-party entities. Nearly 90% of these payments bypassed the banking system, being settled through internal accounting entries rather than real transactions.
Loans versus assets: a stark mismatch
The ED report notes that against loans exceeding ₹6,200 crore, the company’s liquidation value stood at barely ₹600 crore. Asset sales conducted so far have yielded only around ₹434 crore. A senior official described the case as a “textbook example of how vulnerabilities across the financial ecosystem can be exploited,” resulting in public sector banks suffering losses of more than ₹6,210.7 crore, excluding interest.
Arrests, attachments, and the road ahead
The scam came to light with the arrest of S K Goel on May 16 at his New Delhi residence. Subsequently, the ED attached properties worth over ₹106 crore linked to his family members and associates. Earlier, in December 2024, Sureka and his associates were arrested after the agency initiated money-laundering proceedings based on an FIR filed by the Central Bureau of Investigation (CBI).
Investigating agencies say the case raises serious questions about banking governance and oversight, highlighting how insider collusion and weak controls can place vast amounts of public money at risk. Further probes are expected to examine institutional lapses and fix accountability as more layers of the scam come under scrutiny.
