Multiple teams of the Enforcement Directorate (ED) are conducting searches on Wednesday at eight places in Chennai, Bengaluru, Delhi, and NCR in connection with the Hythro Power bank fraud case worth Rs 350 crore.
The ED initiated its investigation based on a case registered by the Central Bureau of Investigation (CBI) in February against HPCL and its promoters.
“The accused, including HPCL and its directors Amul Gabrani and Ajay Kumar Bishnoi, are alleged to have siphoned off and diverted funds to their related entities of HPCL, causing substantial losses to the banks,” a source said.
“Frauds declared by the complainant banks cost Rs 346.08 crore from multiple banks. The PNB has alleged that Rs 168.07 crore was duped, ICICI Bank alleged fraud of Rs 77.81 crore, Kotak Mahindra Bank alleged fraud of Rs 44.49 crore, and the Union Bank has alleged fraud of Rs 55.71 crore. The period of the offence spans from 2009 to 2015,” the source said.
Operating in the power transmission and distribution sector, HPCL was engaged in designing, manufacturing, and constructing turnkey projects for power transmission lines.
“Probe has revealed that M/s HPCL, through its promoters/directors, obtained credit facilities from Punjab National Bank totalling Rs 165.71 crore under a multiple banking arrangement. Despite several restructurings, including conversion of invoked bank guarantees into funded interest term loans (FITL), HPCL defaulted and was declared a Non-Performing Asset (NPA) on March 31, 2015, and later reported as a fraud to the RBI on June 13 last year,” the source said.
During the investigation, a forensic audit revealed that HPCL siphoned off funds through transactions with related companies such as Avadh Transformers Pvt Ltd, GET Power Pvt Ltd, Revolution Infocom, TecproEngg, and others, involving fictitious job work, unpaid receivables, and circular transactions.
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“Several large advances and sale invoices remained unrecovered for years, indicating non-genuine trade dealings. HPCL used related entities to divert funds and misappropriate assets, leading to erosion of creditor interests. The alleged fraud has caused significant financial losses for the banks involved, eroding trust in corporate lending practices. The alleged diversion of funds through related-party transactions and financial manipulation has left banks with substantial losses,” the source said.
