The Enforcement Directorate has seized approximately ₹82 lakh in unexplained cash, two luxury vehicles, and several electronic storage devices during searches across Chennai and Tirupur in connection with an alleged ₹116.79 crore loan fraud involving Indian Overseas Bank. Officers from the agency’s Chennai Zonal Office-II conducted the operations on September 18 at six separate premises under the Prevention of Money Laundering Act. The ongoing probe originates from a case initially registered by the Central Bureau of Investigation against PGC Corporation Limited and its directors, D. Prem, Aadith D. Vikram, and K. Kaleeswaran, who stand accused of causing substantial financial loss to the public sector lender.
Falsified Accounts and Diversion of Loan Facilities
According to investigators, PGC Corporation had secured extensive credit lines from Indian Overseas Bank before its account deteriorated into a non-performing asset in 2013 and was formally classified as fraudulent in 2020. The enforcement agency alleges that the directors submitted manipulated financial statements for the 2011-12 fiscal year to fraudulently obtain enhanced credit facilities. Once the expanded funds were sanctioned, portions of the capital were systematically siphoned off into personal bank accounts and sent to foreign entities rather than being deployed for legitimate commercial requirements.
The probe has highlighted a suspected round-tripping scheme orchestrated through a complex network of domestic and overseas corporate entities established by Prem and Aadith D. Vikram. Agency officials revealed that significant amounts of loan money were transferred abroad under the guise of corporate investments. These overseas funds were subsequently routed back to India and utilized to meet domestic business expenditures. The agency is currently analyzing financial paper trails to map the complete movement of capital across the interconnected corporate network.
Disposal of ₹235 Crore Inventory Under Scrutiny
Investigators have brought transactions involving PGC Corporation stock valued at more than ₹235 crore under intense scrutiny. Agency findings indicate that after Indian Overseas Bank initiated formal loan recovery procedures against the borrower, company management allegedly sold the massive inventory to related entities without receiving actual sale proceeds. These affiliated purchaser companies were subsequently allowed to shut down their operations without seeking the mandatory consent of the lending bank, raising serious questions about fraudulent asset disposal.
Investigators are examining how valuable physical assets and loan funds were systematically transferred through these intermediary entities to defeat creditor recovery. The agency is focusing on whether the liquidation of stock was a coordinated exercise to place assets beyond the reach of lenders while company debts mounted.
Assets Established Under Relatives and Staff
The search operations also uncovered extensive documentation detailing real estate and assets held in the names of the directors’ spouses and family members. Agency officials stated that new business ventures were incorporated using the identities of spouses and trusted employees, while actual administrative control and operational management remained in the hands of the primary accused. The agency believes these proxy structures were designed to shield ill-gotten wealth from recovery.
Digital devices including laptops, mobile handsets, and pen drives seized during the raids are being subjected to forensic analysis alongside retrieved property papers. Investigators are working to trace the ultimate beneficiaries of the diverted funds and confirm the actual ownership of the newly floated enterprises. While the recovered materials provide critical leads, the agency noted that further investigations are in progress and all allegations remain subject to ongoing judicial proceedings.
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