The Directorate of Enforcement (ED), Chennai Zonal Office, has recovered immovable properties of Nathella Sampath Jewellery Private Limited (NSJPL) which were pledged to the consortium of banks led by State Bank of India (SBI).

In a press release, the ED has restituted 27 immovable properties located in Chennai and valued at ₹163.85 crore under the provisions of Prevention of Money Laundering Act (PMLA), 2002 to SBI. The immovable properties were recovered as part of a ₹380-crore bank fraud case involving NSJPL and others. The restitution was made as per the orders of the Principal Sessions/Special Court, Chennai, under Section 8(8) of PMLA.

The ED initiated investigation under PMLA based on an FIR registered by the CBI, Banking Security and Fraud Cell, Bengaluru, on March 24, 2018, based on the complaint filed by SBI on behalf of the consortium of three banks. The consortium of banks had provided a loan amounting to ₹380 crore to NSJPL. It was alleged in the FIR that the accused entity diverted the funds for unintended purposes and did not repay the funds to the bank. The accused entity cheated the banks and caused wrongful loss. Investigation by the ED showed that the promoters of NSJPL used several entities to route and layer the loan funds for unintended purposes and personal benefits.

During the course of investigation, 37 immovable properties worth ₹328.44 crore (being property equivalent to the value of Proceeds of Crime) were attached by the ED on July 31, 2018, under Section 5 of PMLA. Further, a prosecution complaint was filed before the PMLA Special Court on July 15, 2019.

During the course of trial, SBI filed an application for restitution of 27 attached properties under the provisions of Section 8(8) of PMLA. SBI also claimed that it had first right on the 27 attached immovable properties, being the financial creditor under SARFESI Act. The ED had attached properties under PMLA for the benefit of victim banks. As per the order of the Special Court, 27 immovable properties in the city valued at ₹163.85 crore were released to SBI on September 12.

ED restores immovable properties of jewellery to SBI in a bank fraud case