The Enforcement Directorate has searched seven premises across Hyderabad, Secunderabad and Medchal-Malkajgiri in connection with an alleged ₹326.49-crore bank fraud involving Kanakadhara Ventures Pvt Ltd and its directors.
Why Did the ED Conduct Searches?
The searches were conducted on Friday, October 23, as part of a money laundering investigation into the alleged diversion of bank funds by Kanakadhara Ventures Pvt Ltd (KVPL) and its directors.
The searches were carried out under the Prevention of Money Laundering Act (PMLA) and covered the company’s registered office, the residences of its directors and premises linked to entities and individuals suspected of acting as conduits for the alleged diversion of funds.
According to the Enforcement Directorate (ED), the investigation concerns the alleged defrauding of a consortium of banks, resulting in losses of ₹326.49 crore. The agency is examining the movement of funds and the alleged involvement of the company, its directors and other associated entities.
Which Banks Were Affected by the Alleged Fraud?
The alleged fraud involved a consortium led by Punjab National Bank, along with IDBI Bank, Union Bank of India, Andhra Bank, now part of Union Bank of India, and Bank of Baroda.
According to the ED, bank guarantee and letter of credit facilities sanctioned to KVPL were allegedly misused, with funds diverted through related entities and other suspected conduits.
The agency said the alleged diversion involved fabricated steel purchase invoices and transport documents. Investigators are examining how the banking facilities were used and how the funds were allegedly routed through different entities.
The ED also stated that KVPL operated bank accounts outside the consortium arrangement without the knowledge of the lending banks. The alleged transactions form part of the investigation into the reported losses suffered by the banks.
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What Did the ED Seize During the Searches?
During the searches, ED officials seized documents, digital devices and other records considered relevant to the alleged diversion and layering of funds. The agency also seized unaccounted cash amounting to ₹15 lakh.
The searches were aimed at gathering evidence relating to the suspected movement of funds and the role of the company, its directors and other individuals or entities allegedly connected to the transactions.
The agency said multiple immovable properties and investments had also been identified during the investigation. These assets are being examined in connection with the alleged financial irregularities.
The seizure of documents and digital devices is expected to assist investigators in examining the financial transactions and establishing the alleged flow of funds. The available information does not specify the identities of all the individuals or entities whose premises were searched.
What Triggered the Money Laundering Investigation?
The ED initiated its investigation on the basis of a case registered by the Central Bureau of Investigation’s Banking Securities and Fraud Branch (BS&FB) in Bengaluru, following a complaint by Punjab National Bank.
The underlying case concerns allegations against Kanakadhara Ventures Pvt Ltd, its directors and others in connection with the alleged bank fraud.
The ED’s investigation is focused on the suspected diversion and subsequent movement of funds obtained through banking facilities. The alleged use of fabricated invoices and transport documents, along with the operation of accounts outside the consortium arrangement, forms part of the agency’s findings so far.
The searches across the seven premises mark a further step in the investigation into the alleged ₹326.49-crore fraud. The ED said further investigation is underway to examine the transactions, identify the flow of funds and establish the circumstances surrounding the alleged diversion.
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