The board of directors of the Maharashtra-based Seva Vikas Co-operative Bank, led by its former chairman Amar Mulchandani, "violated" all banking norms, deliberately sanctioned loans to shell entities and "siphoned off" funds, the Enforcement Directorate (ED) alleged on Monday.
A statement of the federal agency to this effect came after the Pimpri-Chinchwad Police arrested Amar Mulchandani and five of his family members for "obstructing" an ED raid conducted against the former bank chairman on January 27 and "destruction of evidence".
The ED said it has seized gold and diamond jewellery worth Rs 2.72 crore, about Rs 41 lakh in cash, four high-end cars, digital devices and "incriminating" documents during the searches.
The money-laundering case of the federal agency stems from an FIR lodged by the Pune Police against Vinay Aranha of the Rosary Education Group and others for an alleged loan fraud. The premises of "Vinay Aranha (of Rosary School, Pune) and Sagar Suryawanshi, who have benefitted from this scam", were also searched by the ED last week.
The agency said an audit of the cooperative bank found "gross fraud and misappropriation of funds worth Rs 429.6 crore, spread across 126 NPA (non-performing asset) loan accounts".
"Board of Directors, led by Amar Mulchandani, had violated all banking norms and deliberately sanctioned loans to ineligible/shell entities to siphon off the funds.
"Based on this audit report, additional multiple FIRs were registered against the loan beneficiaries and bank management, including Amar Mulchandani. RBI has cancelled the licence of the bank," the ED said.
The agency said, on January 27, an ED team, accompanied by bank "panchas" (witnesses) and Central Reserve Police Force (CRPF) personnel, reached Mulchandani's residence in the Pimpri-Chinchwad municipal limits, located about 150 kilometres from state capital Mumbai, and "faced stiff resistance" while entering the premises.
"ED team was given to understand that Amar Mulchandani was absent, and the remaining five family members lied and tried to mislead the search team."
"All the family members, as part of a well-planned conspiracy, had obstructed the lawful search of ED and this time was used by Amar Mulchandani to erase his phones and destroy evidence," the agency alleged.
It was subsequently found that Mulchandani was "hiding" in a room locked from inside.
PTI had reported on Sunday that the ED had called a locksmith to open the lock of the room where Mulchandani was allegedly hiding.
On a complaint from the ED, the local police booked all the six residents of the house -- Amar Mulchandani, Ashok Mulchandani, Manohar Mulchandani, Daya Mulchandani, Sadhna Mulchandani and Sagar Mulchandani -- under various sections of the Indian Penal Code (IPC) and all of them have been arrested, the agency said.
All of them are now in police custody, it added.
The Reserve Bank of India (RBI) cancelled the co-operative bank's licence in October 2022.
The bank does not have adequate capital and earning prospects, the RBI had said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)