ED Mumbai arrests former director of private firm in money laundering case

Enforcement Directorate arrests former Mandhana Industries Chairman for bank fraud, seizes assets, ongoing investigation.

The Enforcement Directorate (ED), Mumbai Zonal Office has arrested Purushottam Chhaganlal Mandhana, former Chairman and Managing Director of M/s Mandhana Industries Limited (MIL) (since liquidated), on July 18 under the provisions of Prevention of Money Laundering Act (PMLA), 2002 against MIL and others in a case of bank fraud. 

Purushottam Mandhana was produced before a Special Court (PMLA) on July 19 and was granted ED custody for 6 days, officials said.

The agency initiated an investigation on the basis of FIR registered by CBI, BS & FB, Mumbai against MIL (now GB Global Ltd), Purushottam Mandhana, Manish Mandhana, Biharilal Mandhana and others based on a complaint filed by Bank of Baroda for defrauding consortium of banks to the tune of ₹975.08 Crore, ED officials said in a press statement. 

“MIL and its directors hatched a criminal conspiracy to cause loss to banks and corresponding wrongful gain to themselves by diverting loan funds through fraudulent transactions and circular trading. CBI has not filed the charge sheet in the case. But the ED investigation revealed that Purushottam Mandhana has hatched a criminal conspiracy along with other directors of the company and caused a wrongful loss to the banks for personal enrichment,” an ED official said. 

As per the ED’s report, Purushottam Mandhana had an ulterior motive and incorporated numerous fictitious entities in the name of his employees and he used such entities for layering of funds of MIL including the loan funds. 

“In pursuit of ill motive to dupe the banks, he made bogus sales and purchases with different entities. He has also diverted funds from the accounts of MIL, including the loan funds to pay off his personal debts and those of his family members,” the press statement said.