The Enforcement Directorate (ED) has attached assets worth ₹255.17 crore belonging to N. Nanjundaiah, of the Kanva Group of Companies and other entities, as well other family members in a case related to the alleged cheating of investors. A provisional attachment order under the Prevention of Money Laundering Act (PMLA), 2002, was issued on Friday.
The assets are in the form of immovable properties in Karnataka (agricultural and non-agricultural land and buildings and resorts) and moveable properties in the form of balance in bank accounts, said the ED in a press release.
The accused was arrested in August over the alleged diversion of investors’ funds to the tune of hundreds of crores. According to a release from the ED, investigation conducted under the PMLA revealed that Nanjundaiah, who is also the director of Sree Kanva Souhardha Cooperative Credit Ltd., collected ₹650 crore from 13,000 investors through unauthorised collection centres and agents by promising them higher rates of interest.
“The accused manipulated Sree Kanva Souhardha Cooperative Credit Ltd. accounts and suppressed the actual financial position of the society, which was under losses while it projected a profit. The accused indulged in collection of further deposits and did not follow due procedure while extending the loans, thereby making recovery close to impossible,” said the release.
According to the ED, the money collected was transferred to various accounts of the Kanva Group of entities, as well as to the accounts of the accused and his family members. From the amount collected, over ₹400 crore was allegedly “directly and indirectly swindled and diverted, advanced as loans without any surety to the Kanva Group of Companies owned by N. Nanjundaiah, which are still pending. Nanjundaiah availed loans to the extent of ₹120 crore from various banks and financial institutions, which are also outstanding”.
In this way, Nanjundaiah and others designed a Ponzi scheme and cheated the public at large by not paying the promised interest and not returning their principal amount even after maturity, said the ED.