Former VP of Insolvent Mumbai Firm Held by ED in Rs 975-Cr Bank Fraud Case

A special court has remanded Priyavrat Mandhana, a former vice-president of a Mumbai-based insolvent company, to Enforcement Directorate (ED) custody until August 2. This decision is linked to a money laundering case involving an alleged bank loan fraud exceeding Rs 975 crore. Mandhana, son of the company's former Chairman and Managing Director (CMD) Purushottam Mandhana, was arrested on Monday night under the Prevention of Money Laundering Act (PMLA).

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The ED presented Priyavrat Mandhana before special PMLA court judge A.C. Daga, seeking a 14-day remand. The agency argued that this period was necessary to uncover the modus operandi used by Mandhana and others in committing the alleged fraud and to identify and recover the proceeds of crime. The money laundering case originates from a Central Bureau of Investigation (CBI) FIR against Mandhana Industries and its top executives, including Purushottam Mandhana, Manish Mandhana, and Biharilal Mandhana.

Details of the Alleged Fraud

The CBI FIR was based on a complaint by the Bank of Baroda, which accused the company of defrauding a consortium of banks to the tune of Rs 975.08 crore. The company has since been liquidated and is now known as GB Global Ltd. Previously, Purushottam Mandhana was arrested in connection with this case but was released after the court declared his arrest illegal due to procedural lapses by the ED.

The ED informed the court that they have substantial evidence showing Priyavrat Mandhana's involvement in laundering Rs 73.79 crore. According to the agency, he committed money laundering by possessing, concealing, and using the proceeds of crime for personal gain. "He has committed the offence of money laundering by possessing, concealing and utilizing the proceeds of crime for his personal gains and enrichments," stated the ED.

Defence's Argument

Advocate Karan Kadam, representing Priyavrat Mandhana, contested his client's arrest as illegal and a violation of fundamental rights. Kadam argued that Mandhana was detained at his residence from 7 am on Monday, which restricted his liberty. He further stated that Mandhana was produced before the court at 3 pm on Tuesday, well beyond the mandatory 24-hour limit, rendering his arrest unlawful.

The defence also pointed out that the ED had not provided information on where the laundered money had been spent. Despite these arguments, after hearing both sides, the court decided to remand Priyavrat Mandhana to ED custody until August 2.

The case continues to unfold as authorities seek to unravel the full extent of the alleged fraud and money laundering activities associated with Mandhana Industries.