From Fake Bank Accounts To Luxury Cars: How ₹107 Cr Was Diverted In Panchkula

A former executive of Kotak Mahindra Bank allegedly diverted more than ₹107 crore belonging to the Municipal Corporation of Panchkula into unauthorised bank accounts before using the funds to acquire luxury cars, watches and properties, the Enforcement Directorate (ED) said.

The agency on August 5 said it had attached assets worth ₹131.13 crore in the money-laundering probe. The attachment includes bank balances of ₹12.85 crore and properties valued at ₹118.28 crore. According to the ED, the amount represents the allegedly diverted funds along with interest earned on them.

The agency alleged that Pushpinder Singh, who was then a deputy vice-president at Kotak Mahindra Bank, conspired with Vikas Kaushik, an official of the Panchkula civic body, and Dilip Raghav, another bank employee, to open two unauthorised accounts in the municipal corporation's name using forged documents.

How The Alleged Funds Were Routed

According to the ED, money from Panchkula MC's legitimate accounts was transferred to the unauthorised accounts using fake authorisation letters. The funds were subsequently transferred to several individuals and entities in what the agency described as an attempt to layer the money and hide its source.

The agency further alleged that Singh used the funds to provide unsecured loans to individuals and companies. These loans allegedly carried cash interest of 3% a month, or 36% annually, according to the ED.

The agency said the alleged proceeds were later used to acquire luxury assets, including a Porsche Cayenne, BMW 740Li, Toyota Land Cruiser, Harley-Davidson motorcycles, watches and real estate.

ED Flags Property Transactions, Round-Tripping

The ED alleged that some of the vehicles were sold to third parties after the alleged fraud came to light. It also claimed Singh transferred properties in Sector 2, Panchkula, to his sister Gunita Sethi, with the transaction funded through money received from a firm owned by Singh's wife, Preeti Thakur.

The agency described the transactions as "round tripping" intended to disguise ownership and prevent the properties from being attached under the Prevention of Money Laundering Act (PMLA).

The case began after discrepancies were detected in deposits and accounts maintained by the Municipal Corporation of Panchkula with Kotak Mahindra Bank, according to a PTI report cited by Mint. Kotak Mahindra Bank later said it was examining the matter following instructions from the municipal corporation. In May, the bank's whole-time director Anup Kumar Saha said the ED was investigating the case and that the bank was cooperating with authorities.