The Enforcement Directorate (ED) has restored assets worth over Rs 520 crore to the legitimate claimant company, Macrotech Developers Limited, in a bank-loan fraud case. The case involves Cox & Kings Limited (CKL), its promoters, and others, with the ED estimating the total “proceeds of crime” at Rs 4,100 crore. During the investigation, the ED found that Rs 1,066 crore was siphoned off to V Hotels Limited, with Rs 520.8 crore remaining outstanding and attached under the Prevention of Money Laundering Act (PMLA).
V Hotels Limited later underwent insolvency under the Insolvency and Bankruptcy Code (IBC), and Macrotech Developers Limited was approved as the successful resolution applicant (SRA). The PMLA allows for the restitution or restoration of assets to the defrauded entity, and the ED and SRA worked together to initiate this process. The SRA deposited Rs 520.8 crore in an interest-bearing fixed deposit with the State Bank of India (SBI), representing the substituted value of the attached properties.
The ED consented to the restitution of the assets, subject to the condition that the SRA had no connection with the erstwhile management or beneficiaries of the alleged proceeds of crime. The Supreme Court recently ordered the restoration of the Rs 520.8 crore deposit, along with the accumulated interest, to the SRA under section 8(8) of the PMLA. The court appreciated the efforts made by the ED in restoring the attached properties to secure the interests of justice.
The restoration of assets is a significant development in the case, as it ensures that the legitimate claimant company receives the proceeds of the attached properties. The ED’s efforts in this case demonstrate its commitment to securing the interests of justice and ensuring that the proceeds of crime are restored to their rightful owners. The Supreme Court’s order also highlights the importance of cooperation between the ED and other stakeholders in achieving this goal. Overall, the restoration of assets worth over Rs 520 crore marks a significant milestone in the investigation and prosecution of the bank-loan fraud case.