Ex-VP of Insolvent Firm in ED Custody for Rs 975 Cr Bank Fraud

Mumbai, Jul 30 (PTI) A special court on Tuesday sent Priyavrat Mandhana, a former vice-president of a Mumbai-based insolvent company, to the Enforcement Directorate (ED) custody till August 2 in a money laundering case linked to an alleged bank loan fraud of more than Rs 975 crore.
Priyavrat Mandhana, son of a former Chairman and Managing Director (CMD) of the company, Purushottam Mandhana, was arrested by the ED on Monday night for his alleged role in the fraud and booked under the stringent Prevention of Money Laundering Act (PMLA).
The accused was produced before special PMLA court judge A C Daga by the ED.
The federal probe agency sought his custody for 14 days, saying remand was necessary for knowing the modus operandi employed by him along with the other accused persons to commit the alleged fraud and for the purpose of identifying and unearthing the proceeds of crime.
The money laundering case stems from a Central Bureau of Investigation (CBI) FIR filed against the company, Mandhana Industries, and its top executives Purushottam Mandhana, Manish Mandhana, Biharilal Mandhana and others on the basis of a complaint filed by the Bank of Baroda for "defrauding" a consortium of banks to the tune of Rs 975.08 crore.
The company has been liquidated and is now known as GB Global Ltd.
Former CMD Purushottam Mandhana was earlier arrested in the case. However, the court had declared his arrest "illegal" as the ED didn't provide the accused a copy of the document listing "reasons to believe" that he is guilty of the offence, and set him at liberty.
The ED told the court on Tuesday they are in possession of material that clearly shows Priyavrat Mandhana, who served as vice-president (corporate affairs) at Mandhana Industries, was involved in laundering of the proceeds of crime to the tune of Rs 73.79 crore.
He has committed the offence of money laundering by possessing, concealing and utilizing the proceeds of crime for his personal gains and enrichments, the ED submitted before the court.
However, advocate Karan Kadam, appearing for Priyavrat Mandhana, argued that his client's arrest was illegal and vitiated his fundamental rights.
The advocate claimed the accused was detained at his residence from 7 am on Monday, which curtailed his liberty.
The accused was produced before the court at 3 pm on Tuesday, way after the mandatory 24-hour time limit, making his arrest illegal, he told the court.
The defence further argued that the ED has failed to provide information on where the laundered money has been spent.
The court, after hearing both sides, remanded Priyavrat Mandhana to the ED custody till August 2.