The Enforcement Directorate (ED) on Monday conducted searches at eight locations in Chennai and Tiruvallur in connection with an alleged bank fraud involving State Bank of India (SBI), officials said.
The case relates to a private steel company headquartered in Anna Nagar, Chennai, with its manufacturing unit in Gummidipoondi, Tiruvallur district. The firm is accused of obtaining loans totalling ₹109 crore from SBI in multiple tranches between 2008 and 2014 and then failing to repay them.
After the company allegedly defaulted, the bank scrutinised the documents submitted for the loans and found several of them to be forged, following which SBI filed a complaint in 2020. Based on the complaint, the CBI registered a case against the company’s managing director Krishnamurthy, directors including Vadivambal and Srinivasan, among others.
During the probe, it was found that the loan funds were allegedly diverted and used through overseas subsidiary companies in an illegal manner, leading to an estimated loss of about ₹300 crore to the bank including interest. The ED subsequently registered a separate case under the Prevention of Money Laundering Act (PMLA) and continued the investigation.
Searches were carried out at the company’s office on 2nd Avenue in Anna Nagar, residences linked to Krishnamurthy and Lakshu Manaswamy in Anna Nagar West, and the home of financier Gulnaz Begum in Ayanavaram. Digital evidence, bank account details and property documents were reportedly seized.
