The Enforcement Directorate has uncovered a sophisticated bank fraud scheme totaling ₹350 crore involving KGS Sugar and Infra Corporation Ltd. Through fake documents, round-tripping, and strategic diversions, funds intended for corporate use were siphoned into personal coffers, revealing a deeply entrenched financial crime ecosystem.
Forged Dreams and Fabricated Documents
In a sweeping crackdown, the Enforcement Directorate (ED) conducted search operations on May 23 across Maharashtra—Nashik, Kopargaon (Shirdi), and Thane unearthing a sprawling financial fraud involving M/s KGS Sugar and Infra Corporation Ltd. The investigation, carried out under the Prevention of Money Laundering Act (PMLA), has uncovered a web of deceit that led to the fraudulent availing of bank loans exceeding ₹350 crore from a consortium led by Canara Bank.
The scam, according to ED officials, was orchestrated using forged and fictitious documentation. Promoters of the company, led by director Dinkar S. Bodke, are accused of criminal conspiracy and misrepresentation, producing counterfeit financials and asset declarations to secure massive loans. Once disbursed, these funds were systematically siphoned off under the guise of legitimate commercial operations.
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The Money Trail: Round-Tripping and Diversions
What makes the fraud particularly insidious is its complex laundering structure. The ED’s preliminary findings show that the loan proceeds were funneled through a series of shell entities posing as civil contractors and EPC (engineering, procurement, and construction) service providers. These outfits, allegedly controlled by the accused or their close associates, helped simulate authentic financial transactions that masked the illicit movement of funds.
The pattern of round-tripping—where money exits a business through layered transactions and re-enters as clean capital—was deployed meticulously. According to documents seized, the funds were redirected to acquire high-value assets including luxury vehicles, real estate, gold, and financial securities.
Seizures That Tell a Story
During the raids, investigators seized a cache of incriminating material that paints a vivid picture of personal enrichment at the cost of institutional integrity. Items seized include ₹70.39 lakh in Indian currency, gold jewelry valued at ₹1.36 crore, a high-end luxury vehicle, Demat shares worth approximately ₹10 lakh, multiple electronics, and documents linking the accused to benami properties.
Officials also confiscated evidence suggesting a larger network of compliance evasion—records of false billing, fake invoices, and digital communications that link the bogus contractors with the central accused. “These findings point not just to financial fraud, but also systemic abuse of banking channels,” said a senior ED officer familiar with the probe.
A Broader Nexus Under Scrutiny
The ED launched its investigation following an FIR and subsequent chargesheet filed by Kadim Jalna Police Station, which invoked sections of the IPC for cheating, criminal conspiracy, and forgery, along with provisions under the Prevention of Corruption Act. The charges suggest deliberate misuse of public sector banking systems to benefit a closed network of individuals.
With the probe still ongoing, investigators believe this may just be the tip of the iceberg. The recovery of documents related to benami assets and undeclared transactions hints at the possible involvement of politically connected individuals and financial intermediaries. Enforcement officials confirmed that they are examining additional entities that facilitated the laundering, with more summons and arrests likely in the coming weeks.