The ED initiated money laundering investigation on the basis of an FIR filed by CBI against VMCSL.
Hyderabad: The Enforcement Directorate has arrested Prithvi Information Solutions Limited (PISL) Managing Director Vuppalapati Satish Kumar for money laundering and causing a loss of around Rs 3,316 crore to a consortium of public sector banks. Satish Kumar allegedly committed the offence with the alleged connivance of his sister Hima Bindu B, MD of VMC Systems Limited (VMCSL), an ED press release said.
The ED initiated money laundering investigation on the basis of an FIR filed by CBI against VMCSL. The VMCSL had taken loans from a consortium of banks and the present dues outstanding to all the banks was worth Rs 3,316 crore.
The forensic audit revealed that VMCSL circulated loans to various related entities to inflate its books of accounts and opened various Letters of Credit (LCs) worth Rs 692 crore in the name of fake/dummy entities, which were subsequently devolved.
Satish Kumar through his company and another company Ennar Energy Limited and with the active assistance of his sister Hima Bindu, in order to dodge the banks, created false/exaggerated operational revenues by generating fake sales/purchase invoices through the companies controlled by their family members.
Satish Kumar and Hima Bindu siphoned off a part of the proceeds of crime by remitting it to the overseas entities controlled by their family members, the press release added. Although Satish Kumar claimed that he had no link with the NPA of VMCSL, more than 40 hard disks of VMCSL were recovered from his residence during the search carried out by ED on July 20.
On forensic examination of digital devices, it was found that he was indulged in benami transactions and involved in efforts to transfer fraud amounts to off-shore entities. He was non-cooperative during the investigation and was not supplying documents of his own business entities citing various reasons.
He was arrested under the PMLA on August 12 and was produced before PMLA Special Court, which granted 10 days custody to ED. Earlier, Hima Bindu was arrested under PMLA and is presently in ED custody till August 18.