Bengaluru | In a major development in an alleged ₹899.35 crore bank fraud case, the Enforcement Directorate (ED) has frozen bank accounts holding more than ₹18 crore and seized cash and gold jewellery worth approximately ₹1.27 crore during searches linked to the investigation. The agency said the case pertains to Deepak Cables (India) Limited (DCIL), its director K. Venkateswara Rao, and several other associated individuals who are accused of misusing bank loans and engaging in financial irregularities.
According to the ED, the action was carried out under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. Search operations were conducted on May 21 and May 29 at multiple premises linked to the company and its associates. During the raids, investigators recovered a large volume of documents, financial records, digital evidence and other materials that are now being examined as part of the ongoing probe. Officials believe the seized records could help establish the flow of funds and uncover the structure of the alleged financial network.
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The money laundering investigation originates from a case registered by the Central Bureau of Investigation (CBI). Investigators allege that Deepak Cables (India) Limited and related individuals caused losses of approximately ₹899.35 crore to a consortium of banks led by the State Bank of India (SBI). According to the probe, the company allegedly obtained substantial credit facilities by submitting falsified financial statements and later manipulated its accounts to continue availing those facilities.
Investigators further allege that a significant portion of the loan funds was not used for the business purposes for which the loans had been sanctioned. Instead, large sums were allegedly transferred through various companies and bank accounts, raising suspicions of fund diversion and money laundering.
The ED claims that its investigation has uncovered a complex financial network involving multiple entities. According to the agency, these entities were allegedly used to facilitate fictitious sales and purchases, circular trading transactions and fake corporate guarantees. Such transactions were purportedly designed to artificially inflate the company’s turnover and present a stronger financial position to banks, enabling it to secure additional credit facilities and maintain existing loans.
The agency also alleges that proceeds of the suspected fraud were routed through related companies and personal bank accounts in an attempt to conceal their true origin and ownership. Investigators have reportedly identified several transactions involving substantial amounts of money transferred to entities that appeared to have no legitimate business justification, but were allegedly connected to the principal accused.
During the searches, officials also recovered documents linked to Kolkata-based businessman Mahesh Agarwal and other individuals associated with the case. Investigators are now examining these records to determine how the alleged fraud was structured and who may have benefited from the transactions. Authorities said analysis of financial records and digital evidence is continuing and could lead to further revelations in the coming weeks.
Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said that tracing the flow of funds is the most critical aspect of investigating large-scale banking frauds. According to him, “Fraudulent entities, paper transactions and circular trading mechanisms are often used to obscure the movement of loan funds, but digital banking records, forensic audits and financial trails eventually help investigators expose the entire network. He added that strict enforcement and accountability are essential to protect public and banking sector funds.”
For now, the ED has provisionally frozen bank accounts holding ₹18 crore and seized cash and gold jewellery valued at ₹1.27 crore. The agency is continuing efforts to identify the ultimate beneficiaries of the alleged proceeds of crime, map the complete money trail and determine the role of other individuals who may have been involved. Investigators believe that a detailed examination of bank records, financial documents and digital evidence could lead to significant new disclosures in the high-profile case.
