The Enforcement Directorate (ED) has attached properties worth Rs 244.89 crore of Balasore Alloys Ltd in lieu of the proportionate share of Pramod Kumar Mittal and Global Steel Holding Ltd (GSHL) in the company in a money laundering case related to defrauding State Trading Corporation (STC).
Earlier on the basis of an FIR registered by CBI, STC had agreed to finance GHSL without checking the financial health of the company when it sought financing facility. GSHL availed the financing facility for purchase of raw material for their Philippine-based steel plants on cash and carry basis.
"As per the agreement, raw material had to be lifted only upon payments to STC whereas raw material was supplied despite payments not being made. Thus GSHPL was favoured by violating RBI guidelines and STC exposed itself to financial risk," the ED said in a statement.
The total default mounted up to Rs 2,112 crore.
An FIR was accordingly registered in March this year and thereafter a case of money laundering was registered in ED against Pramod Kumar Mittal, Global Steel Holdings Limited and STC officials.
Following preliminary investigations 87,47,285 shares of Balasore Alloys Ltd having face value of Rs 4,37,36,423 (market value of Rs 62.10 crore pertaining to Mittal and GHSL) were frozen in May 2017.
Investigations have revealed that Mittal and GHSL are holding 30.35 percent of the shareholding of Balasore Alloys Ltd through various Indian and foreign promoter and investment companies and thus have proportionate share of 30.35 percent in the fixed assets of the company.
"Accordingly proportionate share of Mittal and his company GHSL in Balasore Alloys Ltd which includes building, plant and machinery valued at Rs 244.89 crore has been attached in lieu of the proceeds of crime," the agency stated.
MONEY LAUNDERED
STC had agreed to fund GHSL without checking its financial health.
GHSL used the money to buy raw material but didn’t make the payments leading to a default of Rs 2,112 crore.
