The Enforcement Directorate (ED) on 6 March arrested two directors of a Tamil Nadu-based company in an alleged money laundering case worth ₹325 crore linked to a bank fraud case. Hittesh Patel and Suresh N Patel, directors of Shinago Plantations Pvt Ltd, were sent to 10 days ED custody by a special court on Saturday after they were placed under arrest under sections of the Prevention of Money Laundering Act (PMLA), it said in a statement.

Investigation under PMLA revealed that the accused in collusion with the valuers availed loans from erstwhile Corporation Bank (Presently Union Bank of India) on the basis of inflated value of the properties offered as collateral and indulged in the wilful diversion of funds through various group accounts. The investigation further revealed that the funds so availed by various individuals/group concerns in the form of Letter of Credit (LC) and Cash Credit (CC) limits/Agriculture term loans, were transferred within the group entities through circular rotation of money to avail more funds from the Bank without any actual business.

"The funds so availed by various individuals/group concerns, in the form of Letters of Credit (LC), cash credit (CC) limits and agriculture term loans, were transferred within the group entities through circular rotation of money to avail more funds from the bank without any actual business," the agency claimed.

The two allegedly laundered funds to the tune of ₹325 crore by using a network of nearly 20 group entities located across Tamil Nadu. After one day of judicial custody, the Hon’ble Special Court (PMLA) remanded both the accused of enforcement custody for 10 days on 5 March 2021.