ED arrests PISL managing director V Satish Kumar in Rs 3,316 crore bank fraud case

V Satish Kumar was arrested under the Prevention of Money Laundering Act 2002, with the connivance of his sister Hima Bindu B, MD of VMC Systems Limited, a Hyderabad-based telecom equipment manufacturer.

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New Delhi: The Enforcement Directorate (ED) has arrested Vuppalapati Satish Kumar, Managing Director (MD) of Prithvi Information Solutions Limited (PISL), for money laundering and causing a loss of around Rs 3,316 crore to a consortium of public sector banks, the probe agency said here on Thursday.

Vuppalapati Satish Kumar was arrested on August 12 under the Prevention of Money Laundering Act (PMLA), 2002, with the connivance of his sister Hima Bindu B, MD of VMC Systems Limited, a Hyderabad-based telecom equipment manufacturer. 

The ED initiated money laundering investigation on the basis of FIR filed by CBI against M/s VMC Systems Limited (M/s VMCSL). M/s VMCSL had taken loans from a consortium of Banks and the present dues outstanding to all the Banks is worth Rs 3316 Crore. Forensic Audit revealed that VMCSL circulated loans to various related entities to inflate its books of accounts, said the agency statement.

It further said that forensic Audit revealed that M/s VMCSL had opened various Letters of Credit (LCs) worth Rs 692 Crore in the name of fake/dummy entities, which were subsequently devolved. 

"V Satish Kumar through his company M/s PISL and M/s Ennar Energy Limited and with the active assistance of his sister Hima Bindu (MD of M/s VMCSL), in order to dodge the banks, created false/exaggerated operational revenues by generating fake sales/purchase invoices through the companies controlled by their family members," the ED said.

"V Satish Kumar and V Hima Bindu siphoned off a part of proceeds of crime by remitting it to the overseas entities controlled by their family members," the ED added. 

Although V Satish Kumar claimed that he had no link with the NPA of M/s VMCSL, more than 40 Hard disks of M/s VMCSL were recovered from his residence during the search carried out by the ED on July 20, 2021, said the statement.

On forensic examination of digital devices, it was found that he was indulged in benami transactions and involved in efforts to transfer fraud amounts to off-shore entities, the ED said, adding "He was non-cooperative during the investigation and was not supplying documents of his own business entities on one pretext or the other."

Satish Kumar was arrested under PML Act on Aug 12 and was produced before the PMLA Special Court, which granted 10 days custody to ED. Earlier, V Hima Bindu was arrested under PMLA and is presently in ED Custody till August 18, it said.

"Further investigation is under progress," said the ED statement.