New Delhi/Thrissur: The Enforcement Directorate on Wednesday said it has arrested the chairman-cum-managing director of a Kerala-based company in a money laundering probe linked to an alleged cheating case.
CMD of Thrissur-based BRD group, William Verghese, was arrested under the provisions of the Prevention of Money Laundering Act (PMLA) and he was sent to seven days Enforcement Directorate (ED) custody by an Ernakulam court on Tuesday.
The agency had booked Verghese after taking cognisance of over a hundred Kerala Police FIRs registered against him and others on the charge of cheating numerous investors.
"The complainants said they were persuaded by Verghese and others to invest money in various companies promoted by him like BRD Finance Ltd, BRD Securities Ltd, BRD Motors promising 18 per cent returns per annum," the ED said in a statement.
"Initially money was collected as investments and later on issued share certificates but the group companies did not pay dividend as promised and issued bonus shares and cheated them," the central agency said.
Around 140 FIRs were registered against the accused during 2018-2019, it said.
"The ED collected documentary evidence, recorded the statement of various persons and also conducted searches in January at the premises of the group in Kunnamkulam and Kokkalai that included the residence of Verghese in Edappally, Ernakulam," the ED said, adding that several incriminating documents and records were seized.
It was found that Verghese formed various entities and collected money from people within India and outside, it said.
"It has been also found that a number of properties were purchased by Verghese and others in their names out of funds thus collected which represents the proceeds of crime," the ED alleged.
The ED termed Verghese the "mastermind" of the alleged fraud.
David Raj, one of the directors of the company and a close relative of Verghese, travelled to Sharjah and registered a company called BRD International FZE, Hamriya Free Zone, Sharjah (UAE), the agency said, adding that Verghese knew about Raj's business in that country.
Raj collected money for investments from various non-resident Indians in UAE Dirhams promising 18 per cent return and later issued share certificates of the BRD group of companies in Kunnamkulam, Thrissur, in Indian rupees, it said.
"These share certificates were also issued at the rate of Rs 120 per share. The money was collected by cheque drawn in the name of BRD Finance Ltd," the ED alleged.
Verghese and others were collecting money for investments from 2012 onwards and the process is continuing, it said.