KOLKATA/BHUBANESWAR: In the largest ever seizure in money laundering cases in India, the Enforcement Directorate on Thursday seized Rs 295 crore from Rose Valleys 2,807 accounts across the country. The bulk of this is from Bengal, Odisha and Jharkhand. A fortnight ago, ED identified Rs 250 crore in 2,600 accounts of Rose Valley. The seizure is the biggest blow so far to the company, which has allegedly collected Rs 15,000 crore from investors through various schemes, say experts. This is not only the biggest attachment of any bank balance by ED, but also the biggest attachment order ever issued against any chit fund company in the country, a senior ED official said in Bhubaneswar. The 2,807 accounts belong to 27 companies run by Rose Valley. We are trying to locate other movable and immovable assets of the company in Odisha, he added. The development comes soon after the seizure of Rs 138 crore in cash and some gold bars during searches at Sahara Group premises, which government officials had then described as the biggest-ever cash haul. Rose Valley, the Gautam Kundu-run company, is facing multiple investigations by Securities and Exchange Board of India (Sebi), Serious Fraud Investigation Office (SFIO) and ED. Thursdays cash seizure could stifle operations of the group. While a Rose Valley spokesman denied that the seizure will have any significant impact on the companys ongoing businesses, ED sources said a further crackdown will make it difficult for it to continue with collective investment schemes. According to sources, after the order issued by EDs Kolkata office on Thursday, around Rs 295 crore lying in the banks will be sealed immediately. We had identified the cash earlier and the accounts were debit-frozen. Now they will not be able to touch the cash. So far we suspected that Rose Valley was siphoning off money, but now we have specific reasons to believe so, said an ED official. ED sources said that the company has an outstanding amount which could be as high as Rs 9,000 crore. Whatever figure we have come across is as per the 2012-13 balance sheet of the company and we are yet to get hold of its 2014 balance sheets. The company might have raised more money during the period, said the ED official. Sources said that the pan-India default maturity amount of the group is around Rs 362 crore till date. Earlier, ED officials came across 27 companies of the group, of which six were active. We have seen that of the six, most of the money has been raised through Rose Valley Real Estates & Construction Ltd and Rose Valley Hotel & Entertainment Ltd, said the ED official. Moreover, ED officials felt, the company has been trying to shift money from one company to other showing expenditure. A loss of Rs 1,700 crore is clear on the groups papers. It seems that money has been siphoned off from the group companies under garb of expenditure and losses, said the official. But how was Rose Valley shifting the money? Investigators believe that the firm cross- invested in group companies. This way, Gautam Kundu turned the liability of one company into the asset of another. In laymans terms, one company gave loan to another company depleting its reserve, he said. ED officials think that although Kundu has been claiming that he has enough assets to repay his investors, it is not possible for him to pay back investors beyond a period. Two days ago, Justice Nadira Patherya turned down Rose Valleys opposition of debit-freeze on its accounts by ED. Rose Valley on Thursday said they have moved the division bench against the order. Meanwhile, ED has started the process of identifying properties of Rose Valley to eventually attach them.
Posted on: Fri, 28 Nov 2014 01:58:24 +0000