NEW DELHI: Vuppalapati Satish Kumar, MD of Prithvi Information Solutions Limited (PISL), has been arrested by the Enforcement Directorate (ED) in connection with a Rs 3,316 crore bank fraud case.
According to an ED officer, Kumar was arrested on August 12 and held in jail until August 18.
Kumar was arrested under the Prevention of Money Laundering Act (PMLA) for causing a loss of roughly Rs 3,316 crore to a consortium of public sector banks in collusion with Hima Bindu B, MD of VMC Systems Limited, according to the official.
Bindu, Kumar’s sister, was detained by the ED on August 5, this year.
According to an ED official, the financial investigation agency launched a money-laundering investigation based on an FIR filed by the CBI against the company.
He stated that VMCSL has obtained loans from a consortium of banks and that the total amount owed to all of the institutions is Rs 3,316 crore.
According to the ED, the forensic audit indicated that the VMCSL distributed loans to numerous connected firms in order to inflate its books of accounts.
“Forensic audit also revealed that the PISL, a linked organisation, was awarded a 3% commission amount by the VMCSL for all receipts from the BSNL despite the PISL having no specific role in BSNL tenders,” the official said.
According to the official, forensic audits indicated that the VMCSL had opened multiple Letters of Credit (LCs) totaling Rs 692 crore in the name of fictitious or dummy firms, which were then devolved.
He claimed that Kumar, through his companies PISL and Ennar Energy Limited, and with the active assistance of his sister Hima Bindu, MD of VMCSL, created false or exaggerated operational revenues by generating fake sales or purchase invoices through companies controlled by their family members in order to avoid banks.
Kumar and Bindu diverted a portion of the proceeds of crime by remitting them to overseas organisations controlled by their family members, he claimed.
Despite Kumar’s allegation that he had no connection to VMCSL’s NPA, the ED found more than 40 VMCSL hard discs from his home during a search on July 20 of this year.
“According to forensic assessment of digital devices, he engaged in benami transactions and attempted to transfer fraud sums to off-shore businesses. During the investigation, he was uncooperative and refused to provide documents pertaining to his own company organisations under various pretexts “He stated.