Chandigarh, February 25: The Enforcement Directorate (ED) has taken significant action in a bank fraud case involving Mastana Foods Private Limited. The ED has provisionally attached seven immovable properties valued at ₹88.58 crore under the Prevention of Money Laundering Act (PMLA), 2002.
This action follows an investigation initiated based on a complaint from the State Bank of India (SBI), which led to the registration of a First Information Report (FIR) by the Central Bureau of Investigation (CBI). The company and its directors are accused of committing bank fraud amounting to approximately ₹152.85 crore.
The investigation revealed that Mastana Foods artificially inflated its business between the financial years 2014-15 and 2016-17. The company allegedly siphoned off funds through fake transactions and shell companies, engaging in fraudulent circular transactions with related firms that acted as both suppliers and customers, resulting in significant fund movement without any real business activity.
The ED’s findings indicated that the company used fake purchase-sale invoices and fraudulent transport documents to transfer funds through a network of shell firms. The money was quickly returned to the company to create an illusion of legitimate business activity. Many debtor firms were either non-existent or controlled by intermediaries like Suresh Jain, who had no real business operations.
Subsequently, the company created heavy provisions on suspicious loans without recovery, misrepresenting the siphoned funds as business losses. The entire scheme involved layering transactions, creating paper trails, concealing the true identity of funds, and presenting fake financial statements. The fraud was executed by misusing banking channels.
A special CBI court in Panchkula found Mastana Foods Private Limited (MFPL) and its directors, Krishna Mohan and Anil Khurana, guilty of conspiring to defraud SBI. They were sentenced to 2.5 years in prison and fined ₹10,000. The case primarily relates to the rice milling and parboiling business, where loans were taken from SBI’s Chandigarh branch and misused.
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