ED raids several cities in Rs 350 cr HPCL fraud probe
NEW DELHI: The Enforcement Directorate (ED) on Wednesday conducted searches at eight premises in Chennai, Bengaluru, Delhi, and the National Capital Region (NCR) under an ongoing probe into a gigantic financial fraud case of Hythro Power Corporation Limited (HPCL).
The case, estimated to be over Rs 350 crore, has invited close scrutiny of top investigating agencies.
ED’s investigation is based on a previous case filed by the Central Bureau of Investigation (CBI) in February against HPCL and its promoters, Amul Gabrani and Ajay Kumar Bishnoi. T
he authorities accused the duo of hatching a sophisticated financial fraud to siphon off bank money through a network of related companies, incurring heavy losses for a string of banks.
HPCL allegedly obtained credit from various banks dishonestly, such as Punjab National Bank (PNB), ICICI Bank, Kotak Mahindra Bank, and Union Bank of India.
The fraud by these banks comes to Rs 346.08 crore. The top claim is by PNB at Rs 168.07 crore, followed by ICICI Bank at Rs 77.81 crore, Union Bank at Rs 55.71 crore, and Kotak Mahindra Bank at Rs 44.49 crore.
HPCL, engaged in the power infrastructure business—turnkey solutions and transmission line projects—was also extended credit facilities under a multiple banking facility. PNB extended more than Rs 165 crore in loans alone. Yet, despite numerous loan recast attempts as well as conversion of bank guarantees to funded interest term loans (FITLs), the company defaulted on repayment. It was finally marked as a Non-Performing Asset (NPA) on March 31, 2015, and the fraud was duly reported to the Reserve Bank of India (RBI) in June last year.
A pattern of deliberate misappropriation of funds by HPCL’s connected entities came to light through a forensic audit carried out during the ED probe. These entities included Avadh Transformers Pvt Ltd, GET Power Pvt Ltd, Revolution Infocom, and TecproEngg, among others. These transactions entailed fictitious job work, circular transactions, and long-pending receivables, indicative of sham business operations as opposed to genuine trade.
