The Directorate of Enforcement (ED), Bhopal Zonal Office, has filed a Prosecution Complaint (PC) before the Special Court (PMLA), Indore, under the Prevention of Money Laundering Act (PMLA), 2002) against M/s Narayan Niryat India Pvt Ltd, its director Kailash Chandra Garg, and 14 other associated entities and individuals.
The complaint, filed on November 17, 2025, pertains to a large-scale loan fraud and money laundering case involving fraudulent bank transactions. The Special Court (PMLA), Indore, has taken cognizance of the offence on December 5, 2025, marking a key development in the investigation.
Case Originated from CBI’s Bank Fraud Probe
The ED’s investigation was initiated following an FIR registered by the Central Bureau of Investigation (CBI), AC-IV, Vyapam, Bhopal, under various sections of the Indian Penal Code (IPC), 1860, and the Prevention of Corruption Act, 1988.
The CBI had filed a charge sheet against Narayan Niryat India Pvt Ltd, Ambika Solvex Ltd, and several other connected firms and individuals, revealing extensive financial irregularities and banking fraud through forged trade transactions and misuse of credit facilities.
₹110.50 Crore Obtained Through Fraudulent Bank Loans
According to the ED’s findings, Narayan Niryat India Pvt Ltd, controlled by Kailash Chandra Garg, fraudulently secured loans worth ₹110.50 crore from a consortium of banks led by UCO Bank.
The funds were obtained through Letters of Credit (LCs) and Export Packing Credit (EPC) facilities — credit instruments meant to support export-linked business operations. However, investigations revealed that no genuine exports or purchases ever took place, and the transactions were fabricated to obtain and divert bank funds.
Circular Transactions Concealed Misuse of Funds
The ED established that the funds were routed through group entities of Ambika Solvex Ltd, which conducted circular transactions to simulate legitimate business activity. These entities generated false invoices and bank entries to create an illusion of operational turnover.
The loan proceeds were ultimately diverted for personal and corporate enrichment, including cash withdrawals, property acquisitions, and investments through related firms controlled by Garg.
This elaborate structure of inter-linked companies was used to layer and conceal the origin of the diverted funds, fulfilling the legal criteria of money laundering under Section 3 of the PMLA.
Properties Worth ₹27.67 Crore Already Attached
In earlier action, the ED had issued two Provisional Attachment Orders (PAOs) under the PMLA, attaching 37 immovable properties valued at ₹27.67 crore belonging to the accused and their group companies.
These attached assets include residential and commercial properties, land parcels, and industrial units, which investigators identified as being purchased using the proceeds of crime (POC) derived from the fraudulent loan transactions.
The attachment ensures that these assets remain under government control pending the outcome of judicial proceedings.
Pattern of Fraud and Misrepresentation
The investigation revealed a deliberate pattern of banking misrepresentation, where Narayan Niryat India Pvt Ltd and its affiliates forged export documentation, misstated financial data, and misused credit lines to siphon public funds.
By circulating the borrowed money among related shell entities, the accused created the appearance of operational trade turnover while concealing actual fund diversion. The ED found that several linked entities existed only on paper, serving as conduits to move funds out of the formal banking system.
Further Investigation Underway
The ED has stated that further investigation is ongoing to identify additional assets and determine the ultimate beneficiaries of the laundered funds. The agency is also examining potential foreign transactions and investment trails linked to the diverted loan proceeds.
Officials said the case reflects a larger pattern of corporate loan frauds where credit instruments such as LCs and EPCs are misused to generate illicit wealth and launder money through complex financial layering.
The ED reaffirmed its commitment to tracing and recovering proceeds of crime and holding corporate offenders accountable under the PMLA, 2002.
