ED initiates restitution of Rs 290-cr assets to depositors of Maha coop bank 'fraud'

New Delhi, Jan 17 (PTI) The Enforcement Directorate Friday said it has initiated restitution of assets worth more than Rs 289 crore to lakhs of depositors of a Maharashtra-based cooperative bank who were allegedly duped in a fraud.

The case emerges from an FIR filed by the Pen (Raigad district) Police alleging that the office bearers of the Pen Cooperative Urban Bank Ltd. entered into criminal conspiracy with the then auditors and "willfully" manipulated the books of accounts causing a loss of Rs 651.35 crore to the lender.

The bank had 2 lakh depositors and 42,000 shareholders who "lost" their hard earned money, the agency said in a statement.

The ED said its probe found that proceeds generated out of crime of forgery and cheating was "diverted" through "bogus" cash credit accounts opened in the said bank using the services of cheque discounters in the market.

A part of such proceeds of crime was utilised for purchase of immovable properties at different locations in Raigad in the name of third parties (Benami properties), the ED said.

The process of restitution got initiated after a depositor approached the Bombay High Court seeking release of assets worth Rs 289.54 crore that were attached by the ED, under the Prevention of Money Laundering Act (PMLA), as part of investigation.

The HC, in 2016, directed the ED to hand over these properties to the Maharashtra Protection of Interest of Depositors (MPID) authorities. The agency appealed against this order in 2017 and filed a special leave petition (SLP) before the Supreme Court.

The apex court granted a stay to the ED. However, the MPID approached the designated special PMLA court seeking confiscation of the attached property for its restitution, a provision allowed under the PMLA.

"In the larger interest of depositors and the current ongoing restitution efforts, ED took a pragmatic view and decided to withdraw the SLP," the agency said.

An affidavit was filed by the ED before the apex court seeking to withdraw the SLP, which was allowed by the court in December 2024.

The special PMLA court on January 14 ordered the restoration of 29 immovable properties, which are presently valued at Rs 289.54 crore, to the competent authority under MPID Act, the agency said. PTI NES ZMN

Source: PTI