In an extensive enforcement action against corporate banking fraud and illicit fund diversion, federal investigators executed coordinated searches across 12 premises linked to the Tayal Group. The Kolkata unit of the Enforcement Directorate carried out the operations on Wednesday, September 30. Investigative findings indicate that entity firms belonging to the business house utilized forged paperwork, fabricated financial records, and misleading technical data to secure substantial credit facilities from commercial lenders. Upon receiving the loan disbursements, the funds were systematically routed through a multi-tier structure of intermediary corporate entities before being siphoned off into commercial and residential real estate assets. The operational sweep stems from two separate bank fraud probes registered in Kolkata as Enforcement Case Information Reports, with financial sleuths tracing proceeds of crime totaling approximately 820.86 crore rupees across both files.
Extensive Loan Defaults Across UCO Bank and Lender Consortium
The core framework of the agency's probe encompasses substantial losses inflicted upon state-run and commercial financial institutions. The first case centers on credit facilities obtained from UCO Bank, wherein M/s K. Lifestyle & Industries Limited stands accused of executing a loan fraud amounting to approximately 296.25 crore rupees. Investigators noted that company management submitted falsified financial declarations to mislead bank authorities during loan evaluations. The second parallel proceeding involves a multi-bank consortium led by Bank of India. In this matter, M/s Actif Corporation Limited and M/s Jaybharat Textiles and Real Estate Limited are accused of orchestrating a banking fraud valued at approximately 524.61 crore rupees. Collectively, both sets of transactions resulted in unpaid exposures and illicit diversion exceeding 820.86 crore rupees.
Falsified Stock Statements and Unauthorized Asset Disposal
Forensic examination of corporate documentation revealed systematic falsification regarding operational capacity and mechanical assets. Member entities of the Tayal Group furnished false production metrics and inflated machinery valuations to secure elevated credit ceilings from credit officers. Concurrently, the borrowers submitted fraudulent stock inventory statements to maintain ongoing loan drawdowns. In direct violation of secured financing covenants, industrial machinery hypothecated to lender banks as primary collateral was sold off without obtaining mandatory clearance from the lending institutions. Disbursed loan capital was filtered across various structural layers of promoter-controlled paper entities before being channeled into property acquisitions. As part of asset recovery measures under the Prevention of Money Laundering Act, the agency had previously attached the Empress Mall property located in Nagpur.
Manipulating Insolvency Proceedings Following Asset Attachment
A critical dimension of the ongoing investigation details the calculated utilization of statutory insolvency frameworks to circumvent law enforcement actions. Following the provisional attachment of Empress Mall on May 8, 2019, Corporate Insolvency Resolution Proceedings under Section 7 of the Insolvency and Bankruptcy Code were initiated against corporate guarantor M/s KSL & Industries Limited. Investigative findings assert that these insolvency petitions were orchestrated by financial creditors operating in direct alignment with the Tayal Group promoters. Scrutiny uncovered cross-cutting structural links involving at least eight corporate directors connected through intermediary firm networks with five focal directors. Regulatory authorities determined that the debt declarations underpinning the insolvency filing did not represent genuine financial accommodations, functioning instead as fabricated paper transactions intended to capture the restructuring process.
Compromised Voting Margins in the Committee of Creditors
The investigative agency highlighted irregularities concerning the role of resolution professionals managing the corporate insolvency timeline. Claims filed by shell entities closely linked to the corporate promoters were admitted into the insolvency register without rigorous, independent verification. The financial balances on these admitted claims had been artificially multiplied through inflated interest calculations. Consequently, these friendly non-institutional claimants gained an overwhelming majority voting share inside the Committee of Creditors. This strategic takeover reduced legitimate institutional banking lenders to a minority voting position. Enforcement officials maintain that the entire maneuver was deployed to undermine statutory banking safeguards, dilute lenders' legitimate recovery rights, and disrupt judicial attachment proceedings instituted over tainted assets under anti-money laundering legislation.
