Bank loan fraud: ED arrests ex chairman of Pune cooperative bank in money laundering case

New Delhi: The Enforcement Directorate on Wednesday said it has arrested the former chairman of a Pune-based cooperative bank on money laundering charges in a case linked to alleged fraud and misappropriation of funds of the lender worth Rs 429 crore.

Amar Sadhuram Mulchandani, the ex-chairman of Seva Vikas Cooperative Bank, was arrested on July 1 and a special Prevention of Money Laundering Act (PMLA) court sent him to ED custody till July 7, the federal probe agency said in a statement.

"The arrest is made in connection with the ongoing investigation in the Seva Vikas Cooperative Bank fraud case in which the bank suffered a loss of Rs 429 crore in 124 NPA (non performing assets) loan accounts." "This has caused the bank to go bankrupt causing loss to thousands of small depositors," the ED said.

This is the fifth arrest by the agency in this case. The ED had earlier arrested a man named Sagar Suryawanshi, who took loans from the cooperative bank, two ED staffers working on contract at its Mumbai office and a "close associate" of  Mulchandani for allegedly sharing "sensitive" information of this investigation in lieu of bribe.

Talking about the role of Suryawanshi, the ED had earlier alleged that he and his relatives "defrauded" the cooperative bank to the tune of Rs 60.67 crore in ten NPA loan accounts.  "He (Suryawanshi) obtained loans in connivance with Amar Mulchandani and without having sufficient creditworthiness and repaying capacity," the agency had said.

The money laundering probe against Mulchandani and others stems from multiple FIRs registered by the Pune Police on the basis of complaints of the bank and the audit conducted by the Registrar of Cooperative Societies which pointed to "large-scale" fraud and misappropriation of public funds causing a loss of Rs 429 crore to the Seva Vikas Cooperative Bank "causing loss to thousands of small depositors".

The bank was "being run like a family proprietorship by Amar Mulchandani without following any prudent banking norms and favoured loans were sanctioned in return of massive kickbacks", the ED had said.  According to the agency, more than 92 per cent of the loan accounts had turned into NPA which ultimately led to the collapse of the bank and the RBI later cancelled the license of the bank.

Mulchandani and five of his family members were earlier arrested by the Maharashtra Police for "obstructing" an ED raid conducted against the former bank chairman on January 27 and for alleged "destruction of evidence." Assets worth Rs 122.35 crore, including some "benami" properties of Mulchandani, were also provisionally attached by the agency earlier.