ED Raids 12 Locations in Ahmedabad, Mumbai in ₹821-Crore Tayal Group Bank Fraud Case
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Summarized by AI; it may make mistakes. Check important info
The Enforcement Directorate (ED) has sealed 215 bank accounts and recovered ₹20 lakh in cash from the residence of Tayal Group promoter Praveen Tayal. The action followed searches at 12 premises in Ahmedabad and Mumbai under the Prevention of Money Laundering Act (PMLA), in connection with an alleged bank fraud of ₹820.86 crore.
According to the ED, companies of the Tayal Group, including Lifestyle Industries Ltd, Actif Corporation Ltd and Jay Bharat Textile and Real Estate, were allegedly used to carry out the fraud. The agency alleges that loans were taken and not repaid, and that the proceeds were routed through shell companies into real estate.
Who Was Searched
The searches targeted premises linked to Tayal Group promoters and directors Praveen Tayal and Saurabh Tayal. They also covered resolution professionals Kiran C Shah and Vinod P Ambawat, and Ravi Kapoor, a company secretary and resolution professional, whose residential and office premises were searched. Resolution professionals manage a company’s insolvency process.
A corporate consultancy firm at Sahival Plaza in Ellisbridge, Ahmedabad, was also searched.
How the Alleged Fraud Worked
According to the ED’s investigation, the group’s companies opened 215 bank accounts using entities that existed only on paper. New bank loans obtained by the group companies were allegedly not repaid and later turned into non-performing assets (NPAs). The alleged proceeds were then diverted through shell companies into real estate.
Bank Accounts Sealed, Properties Attached
The accounts were sealed under Section 17(1-A) of the PMLA. During the searches, officials also recovered documents relating to immovable properties allegedly concealed from banks.
The agency has also provisionally attached properties, including Empress Mall in Nagpur, valued at about ₹483 crore, and other immovable assets.
Insolvency Route Allegedly Used to Shield Assets
Once a company is in insolvency, its creditors vote on its future, so sham creditors in the process can dilute the real lenders’ say.
The ED alleges that after it attached the properties, the Tayal Group promoters set insolvency proceedings in motion under Section 7 of the Insolvency and Bankruptcy Code, which allows a creditor to ask for a company to be put through insolvency. The agency says they did this through their own shell entities, which were presented as bogus creditors in an attempt to protect the group’s assets.
Role of Resolution Professionals
The ED alleges that the promoters, along with resolution professionals Shah, Ambawat and Kapoor, acted in connivance to execute the fraud. It further alleges that the resolution professionals approved unverified and inflated claims submitted by shell companies linked to the group, which reduced the voting power of the banks and undermined the purpose of the insolvency proceedings.
Attempts to Block Attachment
The agency has further alleged that multiple applications were filed before courts and tribunals seeking cancellation of its attachment orders, and that adverse orders were concealed. Attempts were also allegedly made to stop the ED from taking control of rental income, running into crores of rupees, generated from the attached properties.
