Bank loan fraud: ED arrests automobile company promoter in Madhya Pradesh

Bhopal, Jan 15 (PTI) The Enforcement Directorate (ED) on Monday said it has arrested a Madhya Pradesh-based automobile company owner in a money-laundering case linked to alleged loan fraud against the Canara Bank to the tune of more than Rs 14 crore.

Pushpendra Singh, director of Jagdamba AMW Automotives Private Limited, was arrested on January 13 and produced before a special Prevention of Money Laundering Act (PMLA) court the next day. He was sent to the ED's custody by the court, the federal agency said in a statement.

The arrest came after the ED raided eight locations in Jabalpur, Satna, Katni and Rewa districts of Madhya Pradesh last week.

Cash amounting to Rs 16 lakh and documents related to immovable assets were seized from the residential premises of Singh, the agency said.

Pushpendra Singh, the ED alleged, through Jagdamba AMW Automotives Private Limited and in connivance with former Canara Bank manager Krishna Dutt Dubey (now deceased) and others, committed a fraud to the tune of Rs 14.93 crore (between April 2015 and March 2016) by way of wrongful sanction and disbursal of 50 vehicle loans (for trucks) on the basis of forged and fabricated documents.

"The loan proceeds were transferred to the bank account of Jagdamba AMW Automotives Pvt. Ltd but in majority of the cases, dealer did not deliver the vehicles to customers and loan accounts became NPA, which caused a wrongful loss to bank to the tune of Rs.14.93 crore," it said.

The loan was "siphoned off" from the bank accounts of Jagdamba AMW Automotives Private Limited through RTGS, cash withdrawal, repayment of other term loans etc. for Singh's personal use, the ED alleged.

Singh "knowingly" indulged in the processes and activities connected to the proceeds of crime, it said. PTI NES RC