Fraud In AP Mahesh Cooperative Urban Bank, ED Searches 7 Locations

The Directorate of Enforcement (ED), Hyderabad, conducted search operations on July 31, 2024, under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, at seven locations in Hyderabad in a case of bank fraud involving AP Mahesh Cooperative Urban Bank Ltd.

During the operations, cash of Rs 1 crore, jewellery worth Rs 4.27 crore, foreign currency of USD 6,256, property documents, other incriminating documents, bank locker keys and digital devices were seized.

The ED initiated the investigation on the basis of various FIRs registered by the Banjara Hills Police Station against Chairman of the bank Ramesh Kumar Bung, Umesh Chand Asawa, Puroshatamdas Mandhana and others for disbursing loans of more than Rs 300 crore to various persons and entities against illegal collaterals such as Wakf Board lands and non-existent properties by charging a commission of up to 10% from the loanees for the disbursement of such illegal loans.

The FIRs also alleged the siphoning off of Rs 18.3 crore in the construction of the Head Office building of the bank; siphoning off of Rs 6.5 crore through false bills; and disbursal of gold loans to 1,800 dummy persons and entities through fraudulent means and enrolling them as members and getting votes cast in favour of the accused though such gold loanees were ineligible for voting.

The ED investigation revealed large scale irregularities in the sanctions of loans, operation of the loan accounts and their closure. Properties were found to be acquired by the accused and their family members at values significantly lower than the prevailing market rates, and in some instances at rates lower than the valuation arrived at by the bank at the time of sanction of the loans in the past.

Investigation also revealed suspicious transactions between some of the loanees and the accused / their family members. Routing of loan funds back to the accused and their family members from the loanees' accounts was revealed. In several cases, properties of the loanees were found to have been acquired by the accused and their family members at rates much below their actual values. Properties pledged as collateral securities were also found to have been acquired by the accused and their family members at very low rates.

In addition to the main accused, the premises of their accomplices who were identified during investigation and are suspected to be involved in the offence of money laundering were also searched.