The Directorate of Enforcement (ED) has initiated search operations at eleven premises located in Karnal, Delhi, and Goa as part of an investigation into a Rs 195 crore bank fraud case associated with Mahesh Timber Pvt Ltd. These searches were executed on June 16, under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The inquiry is linked to a Central Bureau of Investigation (CBI) First Information Report (FIR) that was filed against Mahesh Timber Pvt Ltd and its directors for alleged violations of the Indian Penal Code and the Prevention of Corruption Act.

Allegations of Fraudulent Activities

According to the ED, the ongoing investigation centres on the fraudulent enhancement of Foreign Letters of Credit (FLCs) through unauthorised SWIFT amendments, which were reportedly not captured in the bank’s Finacle system. This alleged fraud has been said to result in a wrongful loss of approximately Rs 155.21 crore to Oriental Bank of Commerce and other banks that form part of the consortium. The ED’s findings indicate that Ms Mahesh Timber Pvt Ltd, in purported collaboration with certain entities and individuals based both in India and Singapore, allegedly moved around Rs 195.02 crore through manipulated FLCs, all without any legitimate timber imports.

Reports from customs verification suggest that numerous Bills of Entry and Bills of Lading provided to banks were forgeries. The ED claimed that a network of companies, including Amazon Exports Pte Ltd, Mahesh Timber Singapore Pte Ltd, Traffic Media India Pvt Ltd, BVM Shipping Pte Ltd, and Pearl Maritime Pte Ltd, was allegedly leveraged to fabricate a semblance of timber imports from Singapore into India, which facilitated the fraudulent fund transfers through inflated FLCs.

Key figures allegedly involved in the scheme have been identified, with Ashok Kumar Mittal, Raman Singhal, and Deepak Singla being named as significant players in the investigation. The ED has stated that Mittal and Singhal held directorial or managerial positions in multiple entities implicated during the relevant time frame.

Investigation Unveils Alleged Sham Transactions

Further investigation has revealed what the ED describes as sham transactions concerning the purported sale and purchase of imported timber, despite a lack of actual imports. Additionally, the agency claims that the proceeds of these alleged criminal activities were routed and disguised with the assistance of individuals including Sourabh Dhingra and Bharat Bhushan Mittal, among others.

This ongoing case underscores the ED’s commitment to tackling money laundering and fraudulent financial activities in India. The agency is expected to expand its investigation, potentially leading to further legal actions against those implicated in the case. Investigation reports are continuing to emerge as authorities delve deeper into the financial networks involved in this alleged fraud.

The ED has yet to conclude its inquiries, and as the case unfolds, further details may emerge regarding the full scope of the alleged criminal operations and the roles of all individuals and entities involved. The agency will likely pursue additional measures to recover the lost funds associated with this significant financial irregularity.

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