ED attaches Prakash Industries property worth Rs 117 cr in coal scam
The Enforcement Directorate has attached Rs 117.09-crore movable and immovable properties of Prakash Industries in connection with its ongoing probe against it in the allocation of Fatehpur coal block in Chhattisgarh in 2008, the agency said on Tuesday.
The ED said the proceeds of the crime had been "generated and used in the continuous expansion related to manufacturing activities" therefore the properties were attached under the Prevention of Money Laundering Act (PMLA)."
The ED said: "Prakash Industries filed a false declaration with the Bombay Stock Exchange (BSE) on November 17, 2007, intimating the allocation of coal block. The coal block was actually allocated on February 6, 2008, jointly to Prakash Industries and SKS Ispat Power Ltd."
As a result of filing a false declaration, the shares of Prakash Industries recorded an astronomical rise in their value, the ED said.
"At one point of time on April 2, 2007, the share price was Rs 31 per share whereas it was Rs 351 per share on January 4, 2008. The company in order to encash the artificially created rise in their share value issued 62,50,000 preferential shares on a premium of Rs 180 per share and sold these shares to five selected companies. In this process, the firm generated Rs 118.75 crore in the form of share capital," the ED said.
The ED started a probe after filing a case on August 30, 2014, based on a Central Bureau of Investigation's FIR that followed allegation the firm had applied for allocation of coal block on January 12, 2007, to the Coal Ministry as per the advertisement dated November 13, 2006.
The application was found to be containing false net-worth details and on the basis of such misrepresentation, the company got allocated Fatehpur coal block on February 6, 2008, which was de-allocated in 2014, the ED said.
(With inputs from agencies.)