ED Seizes Dubai Properties Worth Rs 51.70 Crore in Rs 1266.63 Crore SBI Fraud Investigation

The Enforcement Directorate (ED) has seized nine luxury properties in Dubai (UAE) related to the Rs 1266.63 crore State Bank of India (SBI) fraud case allegedly perpetrated by Advantage Overseas Private Limited (AOPL), as announced on Tuesday.

These attached assets include apartments and commercial spaces valued at Rs 51.70 crore. The attachment action was executed on November 17.

According to the ED, this measure addresses bank fraud committed by AOPL, its directors, guarantors, and associated individuals, particularly Shrikant Bhasi, the main director and significant beneficial owner, resulting in a substantial financial loss of Rs 1266.63 crore to SBI.

The ED clarified that the attached properties belong to Shrikant Bhasi, who subsequently transferred them to his daughter as gifts.

The Bhopal zonal office of ED attached these foreign properties under the Prevention of Money Laundering Act (PMLA), 2002.

These Dubai assets are located in prestigious areas including Centurion Residence - Dubai Investment Park Second, Dubai Silicon Oasis, Liwa Heights (Al Thanyah Fifth), Business Bay, and World Trade Centre Residences. The investigation determined they were acquired using Proceeds of Crime (POC) generated from the bank fraud that caused SBI's Shahpura branch a loss of Rs 1266.63 crore.

The ED investigation revealed that Shrikant Bhasi, who maintained strategic control over AOPL and its associated entities, had purchased these properties in Dubai.

"These properties were strategically gifted to his daughter through gift deeds executed in 2022-2023, without any consideration, to conceal the POC. The properties were acquired using funds generated by AOPL and its group entities through illegal merchanting trade transactions, diversion of bank funds, document fabrication, circular trading, and layering of illicit proceeds," stated the financial probe agency in its release.

During the investigation, ED discovered that 12 Foreign Letters of Credit (FLCs) amounting to USD 200 million (approximately Rs 1266.63 crore) were devolved upon SBI between April and May 2018 after AOPL failed to meet mandatory margin requirements and couldn't provide funds during LC rollover.

"Due to depleted Fixed Deposit margins and the company's inability to fulfill its obligations, the bank was forced to make payments to overseas suppliers, causing significant losses to the public sector bank. These devolved LCs form a major component of the POC, which were subsequently layered and laundered through related entities and used for acquiring foreign assets," the agency explained.

The ED further revealed that its investigation has uncovered an extensive network of domestic and foreign entities utilized for layering, fund diversion, and asset acquisition both in India and abroad.