ED Freezes ₹5,115.31 Crore in Assets Linked to Amtek Auto Group Fraud Case.

In a significant development, the Enforcement Directorate (ED) has provisionally attached movable and immovable properties worth approximately ₹5,115.31 crore in connection with the money laundering case involving Amtek Auto Limited and its associated entities. The alleged bank loan fraud amounts to a staggering ₹27,000 crore

Entities Involved

The attached assets are linked to several companies associated with the Amtek Group, including ARG Limited, ACIL Limited, Metalyst Forging Limited, Castex Technologies Limited, and Amtek Group promoter Arvind Dham. The ED's action comes in the wake of First Information Reports (FIRs) registered by the Central Bureau of Investigation (CBI) based on complaints filed by IDBI Bank and Bank of Maharashtra

Nature of Attached Assets

The seized assets include a diverse range of properties spread across 13 different states. The list comprises:
85 immovable properties valued at ₹2,674.75 crore, including large commercial properties, a prime-location farm house in Delhi, and hundreds of acres of land in Maharashtra, Haryana, and Punjab

Shares worth ₹2,353.46 crore in both listed and unlisted companies, such as Alliance Integrated Metaliks Limited, Newtime Infrastructure Limited, Rollatainers Limited, Adhbhut Infrastructure Limited, Gourmet Gateway Limited, Barista Coffee Company Limited, and B S Ispat Limited

Debentures valued at ₹87.10 crore

Supreme Court Intervention

The ED's investigation is based on the Supreme Court's directive issued on February 27, 2024, while hearing a Public Interest Litigation against the Amtek Auto Group. The apex court expressed concerns regarding the diversion of public money and emphasized the necessity of a comprehensive investigation by the ED, even if the banks had settled the accounts

Allegations and Findings

According to the ED, the group companies, including Amtek Auto Limited, ARG Limited, ACIL Limited, Metalyst Forging Limited, and Castex Technologies Limited, along with other group concerns, were taken to insolvency, resulting in a significant haircut of more than 80% for the banks

The ED's investigations revealed that the financial statements of the group companies were manipulated to obtain additional fraudulent loans and create bogus assets and investments in the books of accounts. The agency also uncovered a complex web of more than 500 shell companies used to hold and invest in high-value real estate and luxury properties, with the beneficial ownership concealed

Promoter's Arrest

Based on the findings, the ED arrested Arvind Dham, the main promoter and beneficial owner of the Amtek Group, on July 9, 2024, under the Prevention of Money Laundering Act. The agency alleges that Dham was attempting to alienate or transfer the assets held by the shell companies

Significance of the Case

The Amtek Auto fraud case highlights the ongoing efforts by investigative agencies to uncover and curb large-scale financial crimes in the country. The ED's attachment of assets worth over ₹5,000 crore is a significant step in recovering the losses incurred by banks and ensuring that the perpetrators are held accountable

The case also underscores the importance of robust corporate governance, transparency, and effective regulation in the financial sector to prevent such fraudulent activities from occurring in the future. As the investigation progresses, it is expected that more details will emerge, shedding light on the modus operandi and the individuals involved in this massive bank loan fraud.