‘Loan for purchase of machinery re-routed’, ED files prosecution complaint against Gujarat-based cold storage company

The Ahmedabad zonal office of the Enforcement Directorate (ED) on Tuesday said it has filed a Prosecution Complaint (PC) in the matter of M/s Avon Cold Storage Private Limited under the provisions of the Prevention of Money Laundering Act (PMLA) before the PMLA Special Court on May 31, adding the court has taken cognisance of the matter.

The ED, in a statement on Tuesday, said it had initiated its investigation on the basis of an FIR registered by the Central Bureau of Investigation (CBI) and the Anti-Corruption Bureau (ACB), Gandhinagar, against M/s Avon Cold Storage Private Limited, its directors, and other private persons and public servants, alleging that the accused persons had, in criminal conspiracy, allegedly cheated the Union Bank of India (UBI) by means of falsification of records and providing false/forged documents, dishonestly availing the loan facility.

The ED claimed its investigation revealed that the term loan facility was availed by M/s Avon Cold Storage Private Limited from Union Bank (earlier known as Andhra Bank) after allegedly producing bogus proforma invoices from another company.

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“These credit facilities were extended for purchase of plant and machinery for setting up of a cold storage unit. However, the amount was not utilised for that purpose. The term loan was re-routed through different entities and withdrawn in cash to the tune of Rs 3.92 crore, leaving no money trail behind. The funds were further utilised for purposes other than stated in the loan agreement,” said the ED statement.

The ED also said it had earlier provisionally attached movable and immovable properties valued at Rs 1.30 crore in the case, adding further investigation is under progress.