The logo of the Enforcement Directorate.
Credit: PTI File Photo
Mumbai: Purushottam Mandhana, promoter of Mandhana Industries, used business loans for personal benefit and caused a loss of Rs 975 crore to a Bank of Baroda-led consortium of lenders, the Enforcement Directorate has said in its charge sheet.
Observing that there was a prima facie case against Mandhana and others, a special court for Prevention of Money Laundering Act (PMLA) cases here earlier this month directed the accused to remain present in the court on November 21.
The charge sheet filed by the ED named 18 persons as accused, including Purushottam Mandhana, his wife Prema and son Priyavrat.
Special judge A C Daga took cognizance of the charge sheet on October 1, saying there was a clear, prima facie case under the PMLA.
"All accused persons appear to have been involved in this process of money laundering and ultimately tried to make tainted money untainted," the court noted and issued summons to them.
The charge sheet said that Palghar-based Mandhana Industries is into manufacturing and trading of textiles since the 1990s. It owns other firms, namely, Mahan Synthetic Textiles Private Limited, Balaji Corporation, Golden Seam Industries Private Limited and Dhumketu Finvest Private Limited, but no business was undertaken in them.
The group availed of 21 loans from various banks led by Bank of Baroda for business expansion and other purposes. Two fictitious entities were set up in the name of employees loyal to Purushottam Mandhana, but no genuine business was ever undertaken by these companies, the charge sheet said.
By inflating its turnover without actual business, the Mandhana group managed to get more credit facilities from banks, it alleged.
The bank loans were used by the Mandhana family to repay personal loans, purchase immovable properties and for stock trading among other things, the charge sheet said.
They purchased the shares of Mandhana Industries to inflate the share price, the ED claimed.
The agency had arrested both Purushottam and Priyavrat in the case. While Purushottam is now out on bail, Priyavrat is in judicial custody.