In a major financial crackdown, the Enforcement Directorate (ED) conducted extensive searches on Wednesday in connection with the ₹988 crore loan fraud case involving Shilpi Cables Technologies Ltd (SCTL) and associated entities. Multiple premises across Delhi-NCR and Punjab were raided under the provisions of the Prevention of Money Laundering Act (PMLA).
The action comes as part of an ongoing investigation into alleged money laundering linked to bank loan fraud ED Raids, where public sector banks were reportedly defrauded of nearly ₹988 crore through complex financial manipulation and bogus transactions.
What Triggered the ED Action?
The ₹988 crore loan fraud case stems from an FIR filed by the Central Bureau of Investigation (CBI) against Shilpi Cables Technologies Ltd, a manufacturer of communication cables, and its promoters. The company is accused of cheating a consortium of banks—led by IDBI Bank—by misusing Letters of Credit (LCs) and other trade finance instruments to siphon off huge amounts of borrowed capital.
The ED believes that the loaned funds were routed overseas through fictitious transactions to layer and launder the money.
Locations Searched in ₹988 Crore Loan Fraud Case
According to officials involved in the probe, the ED conducted searches at ten different locations:
- Nine premises in Delhi-NCR, including corporate offices, residential properties, and business sites linked to the company promoters.
- One location in Jalandhar, Punjab, believed to be associated with entities related to SCTL.
These raids were aimed at gathering evidence of money laundering and identifying the trail of diverted funds.
Key Entity Under Scanner: Shilpi Cables Technologies Ltd
At the center of the ₹988 crore loan fraud case is Shilpi Cables Technologies Ltd, once considered a major player in India’s cable manufacturing sector. The company’s managing director, Manish Goel, is under the ED’s radar for allegedly masterminding the fraudulent scheme.
Sources said Goel and his associates are accused of:
- Misrepresenting the company’s financial health.
- Using Letters of Credit (LCs) to import goods, which were either overvalued or never actually delivered.
- Diverting loan funds to shell companies abroad through fake invoices.
- Inflating asset values to secure larger loan amounts from banks.
The ED is now investigating how these funds were laundered and whether foreign accounts were involved.
Modus Operandi in ₹988 Crore Loan Fraud Case
Investigators revealed that in the ₹988 crore loan fraud case, the key method used was the misuse of Letters of Credit issued by the bank consortium. The funds were allegedly sent overseas as part of import payments for goods that were never received.
This is a typical pattern observed in several bank frauds, where:
- Bogus vendors or shell companies are created abroad.
- Import/export invoices are faked to justify fund transfers.
- Round-tripping is used to bring funds back into India under the guise of unrelated transactions.
The ED is currently analyzing the digital and physical records seized during the raids to trace the flow of funds.
Banks Involved and Financial Impact
In the ₹988 crore loan fraud case, IDBI Bank led a consortium of lenders that extended credit facilities to Shilpi Cables Technologies Ltd. The default has had a ripple effect across other member banks, triggering NPA classification and financial losses.
The public money involved in this case makes it one of the most critical fraud cases currently under ED’s scanner.
ED’s Role and Future Course of Action
As part of the investigation into the ₹988 crore loan fraud case, the ED is:
- Recording statements of key individuals.
- Investigating overseas transactions for possible FEMA violations.
- Identifying proceeds of crime and planning attachment of properties under PMLA provisions.
If sufficient evidence is found, the ED could file a charge sheet (prosecution complaint) in the special PMLA court and seek judicial custody of the accused.
Why This Case Matters
The ₹988 crore loan fraud case is emblematic of how systemic abuse of bank loans continues to plague India’s financial system. With increasing scrutiny from watchdogs like the ED, CBI, and RBI, such cases are being brought to light more rapidly. However, recovery and accountability still remain slow due to the scale of manipulation and legal loopholes.
Analysts say that a successful prosecution in this case could set a precedent for stronger compliance checks and loan disbursal protocols in the banking industry.
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