The Enforcement Directorate (ED) has arrested four directors of two Chennai-based companies in a probe related to a money laundering case linked to an alleged collective investment scheme (CIS) fraud of more than Rs 1,100 crore. The central agency said it has arrested three officials of the first firm named Disc Assets Lead India Limited -- its chairman and managing director N M Umashankar, managing director V Janarthanan, director N Arunkumar alias N Arun and Saravanakumar, who is a director in the second company named Dal Marketing Solutions.
The four were arrested under various sections of the Prevention of Money Laundering Act (PMLA) and a Chennai court has sent them to judicial custody.
The ED filed a PMLA case against Disc Assets Lead India after studying an FIR filed against it by the economic offences wing of the Chennai police on the basis of a "complaint received from public.” The agency said the alleged fraud is estimated to be over Rs 1,100 crore.
The agency said, "Disc Assets Lead India Limited, Chennai collected money under various schemes stating that the customers would pay a fixed amount every month for a fixed period by the end of which they were promised lands.”
"But the company defaulted and no lands were allotted," it said in a statement.
It said the SEBI had initiated inquiries against the company and had said that they were doing business of a collective investment scheme for which the market regulator's permission was not taken.
The company, the ED said, in order to "circumvent" these SEBI provisions, started collecting money from the customers through another firm -- Dal Marketing Solutions Limited.
"The amount declared to be collected by the company from the customers was Rs 1,137 crore. But lots of inconsistencies were found between the data submitted by the directors and the data from the banks."
"Investigation revealed that the amounts collected have been diverted in the form of investment in various subsidiaries, royalty, donations, land advance, commission etc. to many entities in which their immediate family members, close relatives and employees of (Disc) were the key managerial personnel," it said.