A major financial irregularity involving a trust fund in Gujarat has taken a significant turn, with a prosecution complaint filed under the Prevention of Money Laundering Act (PMLA) against chartered accountant Tehmul Sethna in connection with an alleged ₹6.85 crore fraud. The case revolves around the misuse of financial authority within a trust, where forged documents and signatures were allegedly used to siphon off funds without authorization.
Accused Misuses Trustee Signature
According to the investigation, the case is linked to the Environment Research & Development Centre (ERDC), a trust where the accused had been entrusted with administrative and financial responsibilities. During this period, Sethna allegedly obtained the signature of one of the trustees under the pretext of opening a bank account. Investigators claim that he later misused the same signature to issue unauthorized bearer cheques.
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Systematic Siphoning of Trust Funds
The modus operandi, as outlined in the probe, suggests a planned and systematic execution designed to avoid detection. By exploiting his position of trust, the accused allegedly ensured that other trustees remained unaware of the ongoing transactions. Over a period of time, funds were withdrawn from the trust’s bank account without proper authorization, resulting in an alleged misappropriation of approximately ₹6.85 crore.
FIR Triggers PMLA Investigation
The amount involved has been classified as “proceeds of crime,” indicating that the funds were generated through illegal means. The case initially emerged following the registration of a First Information Report (FIR) under various provisions of the Indian Penal Code. Since these offences fall under the scheduled offences category of the PMLA, a parallel investigation was initiated, culminating in the filing of a prosecution complaint before a special court in Ahmedabad.
Assets Attached Worth Proceeds of Crime
As part of the financial probe, authorities had earlier issued a provisional attachment order targeting assets linked to the accused. These include multiple immovable properties such as residential flats and land parcels. The total value of these attached assets is said to be equivalent to the alleged proceeds of crime, reinforcing the findings of the investigation.
Investigators believe that the fraud was facilitated by weak internal controls within the trust and the concentration of financial authority in the hands of a single individual. The absence of robust oversight mechanisms and multi-layered auditing systems appears to have created an environment where such misuse could occur without immediate detection.
Financial experts point out that cases like this highlight systemic vulnerabilities in the governance structures of trusts and non-profit organizations. Regular audits, independent verification of transactions, and segregation of financial responsibilities are considered critical safeguards to prevent such incidents. When a single individual is given extensive control over financial operations, the risk of misuse increases significantly unless adequate checks are in place.
The matter is currently pending before a special PMLA court in Ahmedabad, where further proceedings will determine the course of action. Investigative agencies are expected to present detailed evidence, including financial records and transaction trails, to substantiate the allegations.
If proven, the case could result in stringent legal consequences for the accused, including penalties under both criminal law and anti-money laundering provisions. Beyond the legal implications, the incident raises broader concerns about accountability and transparency in institutions that handle public or donated funds.
The case serves as a reminder that financial discipline and governance cannot be compromised, especially in entities entrusted with public trust. Without strong internal controls and continuous monitoring, such institutions remain vulnerable to internal fraud, leading to both financial loss and erosion of credibility.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
