Spl court closes money laundering probe into dispute between 2 firms

The EOW of Mumbai police had, in its closure report, explicitly concluded that no wrongful loss was caused to the complainant firm or its stakeholders, the ED told the special court

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court has closed a money laundering probe related to a financial dispute between a non-banking financial company and a Gujarat-based juice and beverage manufacturer.

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The juice manufacturing firm had alleged that the NBFC had disbursed only a part of the ₹100-crore loan it had agreed to provide, and siphoned off ₹2.92 crore from the firm owner’s personal account. But the Economic Offences Wing (EOW) of Mumbai police had, in its closure report, explicitly concluded that no wrongful loss was caused to the firm or its stakeholders, the ED told the special court on November 19.

The ED ‘s case was based on the EOW case registered in December 2019, which was based on a complaint by D Singh, owner of the Gujarat-based Manpasand Beverages Ltd.

As per the first information report registered by the EOW, Singh had in 2019 approached the late B Patel, director of Finquest Financial Solutions Pvt Ltd, seeking a loan. Patel’s firm had, on July 2, 2019, proposed a term loan of ₹100 crore towards working capital for Manpasand Beverages, through a signed term-sheet.

As per the term-sheet, the loan at an interest of 2% per month was to be disbursed by July 31, 2019 and two nominated directors of Finquest Financial Solutions were to be appointed on the board of Manpasand Beverages. Finquest Financial Solutions would have operational control over Manpasand Beverages, reserve the right to nominate directors constituting at least one-third of the beverage firm’s board, and due diligence would be conducted by an independent agency.

In his complaint, Singh alleged that Finquest Financial Solutions released only ₹9 crore instead of ₹100 crore while retaining operational control of his firm and its assets, worth around ₹1,000 crore. Another case was also lodged in Gujarat in September 2019, alleging Patel and his associates had misused blank cheques belonging to Singh to siphon off ₹2.92 crore from the latter’s personal account.

Based on the EOW case, the ED registered its ECIR ( Enforcement Complaint Information Report) in March 2020. During investigation, the ED learnt that the EOW had filed a B summary report in the case, saying no wrongful loss had been caused to the beverage firm or its stakeholders, the ED told the special court.

The court accepted ED’s closure report and closed the proceedings in the case.