Bengaluru, June 4 (IANS) The Directorate of Enforcement (ED), Bengaluru Zonal Office, has arrested Karuturi Venkateshwara Rao under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, in connection with an investigation into Deepak Cables (India) Limited and others in a case involving alleged fraud against a consortium of banks led by the State Bank of India (SBI), the official statement said on Thursday.
The ED initiated the investigation based on an FIR registered by the Central Bureau of Investigation (CBI) against Deepak Cables India Ltd. (DCIL), its Managing Director K. Venkateshwara Rao, and others. The case pertains to alleged cheating by a bank consortium to the tune of Rs 899.35 crore, involving obtaining large credit facilities and subsequently diverting the funds.
According to the ED, the company allegedly submitted falsified financial statements and manipulated its books of accounts to obtain and continue bank loans.
The investigation further revealed that the accused used multiple entities to carry out fictitious sales and purchases, engage in circular trading, and issue fake corporate guarantees. These methods were allegedly used to inflate turnover, enhance borrowing limits, evergreen existing loans, and divert the proceeds of crime through related entities and personal accounts, thereby concealing their illicit origin.
The ED also found that a substantial portion of the loan funds was diverted to related entities controlled by Karuturi Venkateshwara Rao without any legitimate business purpose.
Based on the evidence collected, the agency stated that there were sufficient grounds to believe that the accused was involved in money laundering as defined under Section 3 and punishable under Section 4 of the PMLA, 2002.
Following the arrest, Rao was produced before the Special Court in Bengaluru, which granted the ED 10 days of custody for further interrogation.
Earlier, searches conducted in the case led to the seizure of gold jewellery and cash worth Rs 1.27 crore, along with the freezing of bank accounts holding balances of about Rs 18 crore.
Further investigation is in progress.
–IANS
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