The Rose Valley Group was found to have collected substantial deposits from the public through false promises of high returns and land allocations
The Enforcement Directorate (ED) in Kolkata made significant progress in its ongoing efforts to provide justice to investors defrauded by the Rose Valley Group. On Friday, the ED successfully facilitated the restitution of Rs. 19.40 crore to the Rose Valley Asset Disposal Committee (ADC). This was done under the directives of the Special Court (PMLA), Kolkata, following orders issued on July 24 and August 17.
The funds have been transferred to the ADC, a committee established by the High Court to manage and dispose of assets attached or seized under the Prevention of Money Laundering Act (PMLA). The restitution marks an important milestone in the ongoing investigation and litigation surrounding the Rose Valley Group’s fraudulent activities.
The Rose Valley Group was found to have collected substantial deposits from the public through false promises of high returns and land allocations. The ED’s investigation identified and attached several properties belonging to the group. Two cases were filed under the PMLA, with the first involving properties valued at Rs. 12 crore and the second concerning assets with a deed value of approximately Rs. 1,200 crore.
Despite opposition from the Rose Valley promoters, the ED and ADC successfully secured an order for the release of the attached properties for restitution to genuine investors. The Special Court directed that the released amount of Rs. 19.40 crore should be distributed to bona fide claimants on a pro-rata basis or as instructed by the ADC or the Court.
The court further stipulated that claimants receiving restitution must execute a bond to refund or reimburse the amount if required at any stage of the proceedings or after the trial concludes. Additionally, all claimants are expected to comply with the ADC’s instructions regarding the disbursement process.
In another development, the ED’s Kolkata Zonal Office provisionally attached movable assets worth Rs. 31.93 crore belonging to M/s Lichen Metals Private Limited (LMPL) on August 28. This action was taken under the provisions of the PMLA as part of an investigation initiated based on a charge sheet filed by the CBI under various sections of the IPC, 1860, and the Prevention of Corruption Act, 1988, against LMPL and others.
The investigation revealed that LMPL, in collaboration with officials from the State Trading Corporation (STC), created fake import indents for 2,000 kg of gold. These indents were split into two requests to bypass internal financial controls that required higher approval. Based on these fabricated indents, STC officials fraudulently secured a forward exchange cover for USD 100 million from the State Bank of India (SBI), intended to protect against exchange rate fluctuations for gold that was never imported.
Despite no gold being imported, LMPL, in collusion with STC officials, later sought the cancellation of the forward cover, resulting in a wrongful gain of Rs. 31.93 crore for LMPL. These illicit gains were then integrated into LMPL’s legitimate business operations, including further gold imports. The investigation into this case is still ongoing.
Meanwhile, the ED’s Allahabad Zonal Office provisionally attached a bank balance of Rs. 4.05 crore under the provisions of the PMLA, 2002, in a case involving M/s Vinayak Nirman Private Limited. The investigation in this case was based on an FIR filed by the Uttar Pradesh Police, following information from the Income Tax Department.
The FIR alleged that Vinayak Nirman Pvt Ltd falsely claimed a deduction under Section 80IB of the Income Tax Act, 1961, based on a forged project completion certificate. The certificate, supposedly issued by the Joint Secretary of the Varanasi Development Authority, was used by the company to fraudulently obtain tax benefits.
The Central Board of Direct Taxes (CBDT) alerted the ED to this bogus tax deduction claim. As a result, the ED launched an investigation under the PMLA, revealing that the company had indeed fabricated documents for its residential project, “The Varuna Garden,” causing significant losses to the government.
The investigation into Vinayak Nirman Pvt Ltd’s activities continues, as the ED works to uncover the full extent of the financial misconduct involved.