Rs 804 cr scam: ED attaches Rs 14.5 crore assets of ABC Cotspin

The Enforcement Directorate, Ahmedabad, on Friday said it has attached properties worth Rs14.50 crore belonging to Ahmedabad-based ABC Cotspin in connection to a bank fraud case of Rs 804 crore. The agency said it is also mulling steps against one of the directors of the firm and the mastermind of the fraud under Fugitive Economic Offenders Ordinance of 2018.

ED said in an official release that it had traced and attached two immovable properties - one situated in Regent Chambers at Nariman Point in Mumbai, and the other at Nikumbh Complex at CG Road in Ahmedabad - worth Rs 14.50 crore. The properties were attached against the amounts fraudulently remitted by the firm’s director outside India.

The Enforcement Directorate had initiated investigations under Prevention of Money Laundering Act, (PMLA) against ABC Cotspin, and its director Ashish Jobanputra and others, on the basis of a case by the Bank Securities and Fraud Cell of Central Bureau of Investigation (CBI), Mumbai.

According to CBI’s case, ABC Cotspin and its director entered into criminal conspiracy with officials of Bank of Baroda, Ahmedabad, and State Bank of India, Gondal, and defrauded the two banks to the tune of Rs 804.49 crore. While SBI was defrauded to the tune of Rs430 crore, the loss to Bank of Baroda was Rs374.49 crore.

Investigations revealed that the firm was availing bill discounting facilities from the two banks against Letters of Credit issued by prime banks. The agency said that in 2014-15, Jobanputra got prepared fake export documents such as commercial invoice, certificate of origin, certificates of quality & quantity, packing list, bills of exchange, etc. He also got prepared fake bills of landing by various shipping agents and presented them to the two banks. Talking about the role of the bank officials, ED said that they discounted the export bills without proper scrutiny, and without ensuring that Shipping bills issued by Customs Authorities were available at the time of discounting.

“They also discounted export bills on the basis of Letters of Credit (LC) issued by Industrial and Commercial Bank of China, which was restricted,” the agency said further. Investigations revealed that the said company had syphoned off Rs79.49 crore out of India on the pretext of imports that had never taken place.