The Enforcement Directorate’s Chennai zonal office has carried out searches at seven locations linked to Thangam Steel Ltd, PS Krishnamurthy Steels Pvt Ltd, their directors and other accused persons in connection with an alleged State Bank of India fraud, identifying 43 immovable properties held in benami names and valued at more than Rs 100 crore.
Searches Follow CBI FIRs and Chargesheets
According to the agency, the searches were conducted on May 19 under the Prevention of Money Laundering Act. The investigation was initiated on the basis of two first information reports registered by the economic offences branch of the Central Bureau of Investigation in Chennai for offences related to cheating and fraud under the Indian Penal Code.
The Enforcement Directorate said the CBI cases alleged that Thangam Steel and PS Krishnamurthy Steels cheated SBI to the extent of Rs 311 crore. It also noted that chargesheets have already been filed by the CBI in the matter.
During the searches, the agency said it seized incriminating documents and electronic records, while also identifying a large number of immovable properties allegedly linked to the accused and held through benami arrangements.
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Agency Alleges Fabricated Records and Diversion of Funds
According to the Enforcement Directorate, the two companies, engaged in steel manufacturing and trading, allegedly carried out large scale bank fraud by fabricating records, diverting funds and engaging in circular trading to inflate turnover and profits in order to cheat SBI led consortium banks.
The agency alleged that between 2007 and 2013, the accused secured enhancement of cash credit and letter of credit limits by submitting forged financial statements, inflated stock and receivable statements, and fabricated trade documents.
It further claimed that fictitious godowns and false transport records were created, and that different balance sheets were submitted before SBI and the Registrar of Companies in order to conceal the actual financial position of the firms.
Benami Properties and Shell Entities Under Scanner
The Enforcement Directorate said bank funds were allegedly diverted to acquire a steel division and to purchase personal assets through fake and shell entities. According to the agency, the funds were layered through multiple transactions to conceal their origin and ownership.
The agency said the overall conspiracy allegedly caused wrongful loss of about Rs 311 crore to SBI and corresponding wrongful gain to the accused. It added that the searches led to the discovery of several movable and immovable assets held in the names of benamidars, family members and distant relatives of the accused.
According to the agency, these properties were structured in a manner intended to prevent banks from tracing and recovering the loan amounts. The investigation is continuing, and officials said further inquiry in the case remains in progress.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
