Hyderabad: The Enforcement Directorate (ED) facilitated the restitution of properties worth 30.7 crore to the State Bank of India (SBI) in connection with a money laundering case involving Sheetal Refineries Limited (SRL) and others.
Acting on the ED’s initiative, SBI filed restitution applications under section 8(8) of the Prevention of Money Laundering Act before the special court of the metropolitan sessions judge in Hyderabad, seeking the release of immovable properties seized by the ED’s Hyderabad zonal office.
The ED urged the court to release the seized properties to the rightful claimant, SBI, in the interest of the public. In its orders (dated Feb 7, 2025), the court granted the petition, directing the release of immovable properties worth 30.7 crore, belonging to Sheetal Refineries Limited and its directors.
The ED had been investigating a money laundering case against SRL and others. SRL had availed various credit facilities from a consortium of banks, including SBI and PNB, which later became non-performing assets. SRL obtained 21 fraudulent letters of credit from these banks based on fake and forged invoices, with no actual material supply or legitimate business transactions.
The promoters of SRL diverted funds from the devolved letters of credit into SRL’s accounts and their own family members’ accounts. Part of the proceeds of crime was withdrawn in cash, while a significant portion was used to make investments in immovable properties in the names of the promoters and their families.
This resulted in a wrongful loss of 136.2 crore to SBI and 53.8 crore to PNB.
Devolved letters of credit are often used to provide additional security for the seller, particularly in situations where the buyer’s creditworthiness is in question, or the transaction is seen as high-risk.
The ED attached assets worth 52.7 crore through provisional attachment orders in 2016 and 2022.
Acting on the ED’s initiative, SBI filed restitution applications under section 8(8) of the Prevention of Money Laundering Act before the special court of the metropolitan sessions judge in Hyderabad, seeking the release of immovable properties seized by the ED’s Hyderabad zonal office.
The ED urged the court to release the seized properties to the rightful claimant, SBI, in the interest of the public. In its orders (dated Feb 7, 2025), the court granted the petition, directing the release of immovable properties worth 30.7 crore, belonging to Sheetal Refineries Limited and its directors.
The ED had been investigating a money laundering case against SRL and others. SRL had availed various credit facilities from a consortium of banks, including SBI and PNB, which later became non-performing assets. SRL obtained 21 fraudulent letters of credit from these banks based on fake and forged invoices, with no actual material supply or legitimate business transactions.
The promoters of SRL diverted funds from the devolved letters of credit into SRL’s accounts and their own family members’ accounts. Part of the proceeds of crime was withdrawn in cash, while a significant portion was used to make investments in immovable properties in the names of the promoters and their families.
This resulted in a wrongful loss of 136.2 crore to SBI and 53.8 crore to PNB.
Devolved letters of credit are often used to provide additional security for the seller, particularly in situations where the buyer’s creditworthiness is in question, or the transaction is seen as high-risk.
The ED attached assets worth 52.7 crore through provisional attachment orders in 2016 and 2022.
