ED alleges ex-Kotak VP bought luxury cars With Rs 107-Crore Panchkula fraud proceeds

The Enforcement Directorate alleged a former Kotak Mahindra Bank executive used funds siphoned from Panchkula Municipal Corporation accounts to buy luxury vehicles and other assets. The agency said the ₹107.24-crore fraud involved fake accounts and forged authorisations

New Delhi: A former deputy vice president of Kotak Mahindra Bank purchased luxury vehicles, including Porsche, BMW and Harley-Davidson models, using funds he allegedly siphoned from the accounts of the Panchkula municipal corporation in Haryana, the Enforcement Directorate (ED) said.

The federal agency made the claim in a chargesheet filed on July 30 against the former bank executive, Pushpinder Singh, and eight others before a Prevention of Money Laundering Act (PMLA) court.

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Singh, two other staffers of the private lender (Kotak Mahindra), and an employee of the Panchkula (Haryana) municipal corporation are accused of defrauding the Haryana government of more than Rs 100 crore by allegedly diverting the civic body’s fixed deposits.

The four allegedly perpetrated a fraud to “embezzle” the funds belonging to the state government department, the ED said. During the investigation, the ED said it found that Singh purchased high-end vehicles, including a Porsche Cayenne, BMW Z4, BMW 740Li, BMW X7, BMW 749i, Jeep Wrangler (2021 and 2024 models), Land Cruiser and a Harley-Davidson motorcycle from the proceeds of the crime, the ED said in a statement issued on August 5.

It said the vehicles were later sold to third parties after the alleged fraud was detected. The money laundering case stems from an FIR filed by the Haryana Anti-Corruption Bureau (ACB) on charges of embezzlement of funds belonging to the Panchkula municipal corporation through a “deep-rooted and well-organised” criminal conspiracy.

According to the ED, Singh, in connivance with municipal corporation official Vikas Kaushik, and another Kotak Mahindra Bank employee, Dilip Raghav, opened two “unauthorised” bank accounts in the civic body’s name using “fake” documents and authorisations.

“All genuine communications, authorisation letters and instructions sent by municipal corporation Panchkula were disregarded, and a series of parallel authorisation letters were created by Singh and Kaushik, with the support of others, for the purpose of opening these two illegal accounts,” the ED said.

Thereafter, they transferred the corporation’s funds from its genuine accounts with Kotak Mahindra Bank to these unauthorised accounts using “fake” authorisation letters created in the name of MC Panchkula. “It is learnt that Satish Kumar of Kotak Mahindra Bank was also involved in this fraud,” it said.

Mobile numbers and email IDs linked to the two fake accounts, as well as those of the genuine accounts, were updated with mobile numbers and email IDs that were “under the effective control of” Kaushik and Singh, the agency alleged.

This, it said, was done in order to circumvent the checks and balances prescribed in Kotak Mahindra Bank’s Standard Operating Procedures (SOPs) for the prevention of unauthorised bank transfers.

This way, the entire system of checks and balances was completely compromised by the “collusive” actions of Singh and Kaushik, with the support of others, the ED alleged.

The agency claimed these funds were transferred to people and entities linked to the duo, including to Singh’s wife Preeti Thakur. Some of the funds were also used to purchase luxury watches and furniture.

The ED further alleged that after the fraud was detected, Singh “deliberately” sold properties in Sector 2, Panchkula, to his sister Gunita Sethi, in a bid to conceal ownership through alleged round-tripping of funds.

This was against the funds received by Gunita Sethi from a firm owned by Preeti Thakur, it alleged. “This round-tripping of funds was done with an intent to disguise the ownership of these properties for the purpose of alienation from attachments under provisions of PMLA,” the ED said.

Singh is also alleged to have “advanced” these funds to give unsecured loans to individuals and some entities at the rate of 36 per cent per annum in cash. The ED pegged the total defrauded sum at Rs 107.24 crore and said that it has also attached assets worth Rs 131 crore in the case.