Indore/Mumbai, Dec 25 (AHN) The Directorate of Enforcement (ED), Indore Zonal Office, has conducted extensive search operations under the Prevention of Money Laundering Act (PMLA), 2002, at multiple locations in Indore and Mumbai, the investigation agency said on Thursday.

The raids on December 23 targeted premises linked to the Ruchi Group in connection with ongoing investigations into alleged bank fraud cases.

The probe stems from multiple FIRs registered by the Central Bureau of Investigation (CBI), Bhopal, against several Ruchi Group entities. These include M/s Ruchi Global Ltd. (now renamed M/s Agrotrade Enterprises Ltd.), M/s Ruchi Acroni Industries Ltd. (now M/s Steeltech Resources Ltd.), and M/s RSAL Steel Pvt. Ltd. (now M/s LGB Steel Pvt. Ltd.), it said.

The companies, promoted by the late Kailash Chandra Shahra and Umesh Shahra, are accused of orchestrating large-scale bank frauds through fund diversion, siphoning, and accounting manipulations, resulting in substantial wrongful losses to public sector banks.

The ED officials revealed that the investigation uncovered a sophisticated conspiracy involving the creation of numerous shell entities, the agency said.

These were used for round-tripping transactions, where spurious Letters of Credit and Cash Credit facilities were manipulated to divert funds for private gain.

Bogus sales and purchases were recorded, and deliberate losses inflicted to siphon off loan amounts obtained ostensibly for legitimate business purposes, it said.

Proceeds of crime generated from these frauds were allegedly concealed and layered to disguise their illicit origins.

During the searches, authorities froze bank balances exceeding Rs 20 lakh belonging to the accused persons and their family members. Additionally, cash amounting to over Rs 23 lakh was seized, along with significant incriminating documents and digital devices that establish the roles of the accused in the fraud, said the agency.

This action revives scrutiny on the Ruchi Group, which has faced prior allegations of financial irregularities.

Earlier CBI probes, dating back to 2021, had flagged similar issues in group companies, including a Rs 188 crore fraud case involving a bank consortium.

The current ED operation signals intensified efforts to trace and recover laundered assets, it said.

Further investigation is progressing, with sources indicating potential attachments of properties and deeper probes into the beneficiaries of the diverted funds.