Enforcement Directorate raids in Rs 90-cr scam in Tamil Nadu

The Enforcement Directorate (ED) on Saturday conducted searches at nine locations in Tamil Nadu in connection with an alleged Rs 90 crore bank loan fraud money laundering case.

Searches were conducted at Virudhunagar, Madurai and Coimbatore in connection with the probe involving Ms Inshumathi Refineries Pvt Ltd, sources said, adding that a criminal case under the Prevention of Money Laundering Act (PMLA) has been filed.

The company is managed by R Shenbagan and others. Residential and business premises linked to him are being raided, officials said.

"IRPL was enjoying cash credit facilities, Letter of Credit (LOC) facilities and term loans from State Bank of India's overseas branch in Chennai.

"It had availed a total of 46 LOCs from the SBI, which were issued against bogus firms/fake invoices for a value of around Rs 87.36 crore, which was devolved on the bank -- which means that the LOC remained unpaid -- later due to insufficient funds in their account and also diverted the business proceeds, which resulted into a pecuniary loss of around Rs 90 crore to SBI," the ED said in its complaint.

The ED has filed a PMLA case against the firm based on a CBI FIR and chargesheet against R Shenbagan and others.