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The Enforcement Directorate (ED) on Thursday arrested Rup Chand Baid, 58, promoter of logistics firm Siddhi Vinayak Logistic Ltd (SVLL) for his role in aiding laundering of tainted money in the alleged Rs 846.29-crore Bank of Maharashtra loan fraud case.
Baid, according to ED, was arrested in Mumbai under the Prevention of Money Laundering Act. Surat-based SVLL, had in 2012, launched a scheme called ‘Chalak se Malak’ (from drivers to owners) as a part of its corporate social responsibility program. Under this scheme, the firm took loans from the Bank of Maharashtra to fund the purchase of used as well as new trucks by drivers.
Subsequently, SVLL defaulted on the loan repayment to the bank. “After disbursement of the loan to these companies, the loan money was circulated through chain of group associate companies through a series of unsecured loan and fraudulent transactions. Rup Chand Baid is the mastermind behind the entire criminal act of money laundering by embezzlement of bank loans which was obtained using forged documents,” said an ED statement.
According to ED, Baid has shown his wife, sons, daughter-in-laws and some employees as directors in several companies through which money was layered. In 2015, a forensic audit by the bank allegedly found that SVLL had misused the loan funds. The forensic report alleged that out of the total loan disbursed to the firm, at least Rs 629.84 crore was misutilised. Apart from this, the audit allegedly found that there was no money trail for at least Rs 339.29 crore as SVLL was not able to produce adequate data to the forensic auditors.
Following the forensic audit, the bank declared SVLL a wilful defaulter and in September 2015, the CBI registered a case against the firm.