ED Attaches ₹13 Crore Properties in ₹26 Crore Indore Warehouse Fraud

The Directorate of Enforcement (ED) has provisionally attached 18 immovable properties valued at ₹13 crore in connection with a bank fraud case involving Alok Sharda and others in Indore, Madhya Pradesh.

The ED investigation was initiated based on two FIRs registered by the Economic Offences Wing (EOW), Bhopal, relating to allegations of cheating and fraud with a private bank and M/s Kisan Dhan Agri Financial Services Private Limited, a non-banking financial company.

Alok Sharda, proprietor of M/s Sharda Warehouse, Manpur, Indore district, allegedly misused the Warehouse Receipt Finance Scheme by showing agricultural commodities purportedly belonging to farmers as stored in the warehouse and issuing warehouse receipts. Loans were sanctioned to 42 farmers against 62,965 bags of soybean and gram based on these receipts.

However, the investigation revealed that the pledged commodities were unauthorisedly removed and disposed of, while forged/fictitious warehouse receipts, false representations regarding stock availability, and suppression/removal of records were used to obtain and continue the loan facilities. This caused a wrongful loss of ₹14.04 crore to the bank and corresponding wrongful gain to the accused persons.

Similarly, M/s Kisan Dhan Agri Financial Services had sanctioned warehouse receipt finance of ₹12.04 crore to Alok Sharda against agricultural commodities represented to be stored in the same warehouse. Subsequent verification revealed a substantial shortage of pledged stock, and the pledged commodities were unauthorisedly removed and disposed of without the requisite release/NOC from the lender.

Thus, Alok Sharda and other accused persons, acting in connivance, caused wrongful loss of approximately ₹26 crore to the bank and Kisan Dhan Agri Financial Services Private Limited, while deriving corresponding wrongful gains.

The ED has attached properties under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) to prevent the accused from disposing of the properties and to recover the losses incurred by the bank and the non-banking financial company.

The investigation highlights the need for stricter regulations and monitoring of warehouse finance schemes to prevent such frauds. The ED's action is a step towards recovering the losses and bringing the accused to justice.

The case has significant implications for the banking and financial sector, as it highlights the vulnerabilities of warehouse finance schemes to fraud and misuse. The ED's investigation and attachment of properties are expected to serve as a deterrent to potential fraudsters and help prevent similar cases in the future.

In conclusion, the ED's action in attaching properties and investigating the ₹26 crore warehouse finance fraud in Indore is a significant step towards combating financial crimes and recovering losses. The case serves as a reminder of the importance of strict regulations and monitoring in the banking and financial sector to prevent such frauds.