ED Arrests Director for fraudulently obtaining bank loans in excess of Rs 75 Crore

On March 29, 2022, the Enforcement Directorate (ED) arrested Gyan Prakash Sarawgi, Director of M/s Sarawgi Builders & Promoters Pvt. Ltd., under the Prevention of Money Laundering Act (PMLA), 2002 in a case involving fraudulently obtaining bank loans and investing them in textiles and garments. Gyan Prakash Sarawgi, the accused, was produced before the Hon’ble Additional District & Sessions judge under PMLA, Ranchi, and the court granted him ED custody for seven days.

The ED launched a money-laundering investigation based on three FIRs filed by the CBI’s Economic Offence Wing (EOW), Ranchi, against M/s Sarawgi Builders & Promoters Pvt. Ltd. and others. According to these FIRs, the total amount of fraud/NPAs amounted to Rs. 31.24 Crore. However, during the course of the investigation under the PMLA, the proceeds of crime were discovered to be in excess of Rs 75 Crore.

The ED investigation revealed that bank loans were finally laundered into the accounts of M/s Sarawgi Builders and promoters Pvt. ltd., which was primarily engaged in the Real Estate business, via a maze of transactions involving many intermediary companies. According to the investigation, the bank loans were used to create and acquire immovable properties, which he then sold, and the proceeds were syphoned off through numerous bank accounts under his control.

On 15.12.2021, searches were conducted at the residence and business premises of the accused person, Gyan Prakash Sarawgi, and others, and several incriminating documents were seized. The examination of such documents revealed that the accused person and others engaged in large-value transactions in cash as well as through fictitious banking channels.

The case is being investigated further.