The Enforcement Directorate (ED) has arrested Vuppalapati Satish Kumar, MD of Prithvi Information Solutions Limited (PISL) for alleged money laundering and causing a loss of around Rs 3,316 crore to a consortium of public sector banks with the connivance of Hima Bindu B, MD of VMC Systems Limited (VMCSL).
Both PISL and VMCSL are headquartered at Hyderabad.
The ED had initiated money laundering investigation on the basis of FIR filed by CBI against VMCSL. The company had taken loans from a consortium of banks and the present dues outstanding to all the banks is worth Rs 3,316 crore, the agency said in a statement.
“The Forensic Audit revealed that VMCSL circulated loans to various related entities to inflate its books of accounts. The Forensic Audit further revealed that VMCSL had opened various Letters of Credit (LCs) worth Rs 692 crore in the name of fake/dummy entities, which were subsequently devolved,” it said.
V Satish Kumar, through his company PISL and Ennar Energy Limited and with the active assistance of his sister Hima Bindu (MD of VMCSL), in order to dodge the banks, created false/exaggerated operational revenues by generating fake sales/purchase invoices through the companies controlled by their family members.
Kumar and Bindu siphoned off a part of proceeds of crime by remitting it to the overseas entities controlled by their family members.
Although Kumar claimed that he had no link with the NPA of VMCSL, more than 40 hard discs of VMCSL were recovered from his residence during the search carried out by ED on July 20, 2021.
On forensic examination of digital devices, it was found that he was indulging in ‘benami’ transactions and involved in efforts to transfer fraud amounts to off-shore entities, it further said.
He was non-cooperative during the investigation and was not supplying documents of his own business entities on one pretext or the other. He was arrested under Prevention of Money Laundering Act and is undergoing ED custody of 10 days. Earlier, Bindu was arrested under PMLA and underwent ED custody till Thursday.