The Enforcement Directorate (ED) has issued a provisional attachment order under the PMLA to provisionally attach assets worth over Rs 255 crore in a case related to cheating of investors.The attached assets are in the form of immovable properties and movable properties in the form of balances in bank accounts in the name of N Nanjundaiah and his family members, Kanva group of companies and other entities.The investigation was conducted subsequent to the complaint received from the Office of Registrar Cooperative Societies and FIRs registered by Basaveshwara Police Station against N Nanjundaiah and M/S Sree Kanva Souhardha Co-Operative Credit Limited (SKSCCL) under various sections of the IPC.It was alleged that the key accused N Nanjundaiah collected Rs 650 crore as deposits from the public and assured high return rates through commission agents, without maintaining required liquidity.MODUS OPERANDIThe accused advanced loans out of deposits, working capitals and shares reserves without getting any security, thus violating existing rules.Searches under PMLA were conducted in the premises of the accused N Nanjundaiah and other Directors of the M/s Sree Kanva Souhardha Co-operative Credit Limited (SKSCCL) and Kanva group of companies which resulted in seizure of incriminating documents.N Nanjundaiah was arrested on August 25 under PMLA and is currently in judicial custody.Investigation conducted so far has revealed that N Nanjundaiah, founder and common director of Sree Kanva Souhardha Co-operative Credit Limited and M/s Kanva Group of companies collected Rs 650 crores through unauthorised collection centers and collection agents from about 13,000 investors by luring them to pay higher rate of interest (from 12 to 15 %).The accused manipulated SKSCCL accounts and suppressed the actual financial position of the society, which was under loss whereas it was projected as profit.

The accused also indulged in collection of further deposits and did not follow any procedure while extending loans, thereby making recovery close to impossible.A huge amount was spent illegally on collection agents and collection centers and Kanva group of company’s staff salary and other perks.

They maintained very low liquidity in the SKSCCL accounts.They also made dubious entries wherever required in the cloud-based Zenith Software, edited and submitted the “window-dressed” report to authorities.SKSCCL has deliberately violated the Souhardha Sahakari Act rules and failed to practice the finance rules and regulations and collected huge money from the public at large.

From the collected amount more than Rs 400 Crores was swindled, diverted and advanced as loans without any surety to Kanva group of companies, owned by N Nanjundaiah.N Nanjundaiah availed loans to the extent of Rs 120 crore from various Banks and financial institutions, which are also outstanding.The investigation further revealed that he collected money that was embezzled and transferred to various accounts of Kanva group of entities and his family members' accounts and other persons related to the KSCCL.From the siphoned money, the accused had acquired more than 160 immovable properties and movable properties in his name and in his family members and entities owned by him.Some of the properties have already been sold to further conceal the embezzled money.This way N Nanjundaiah and others nefariously cheated the public at large by not paying the promised interest and not returning back their principal amount even after the maturity.Accordingly, identified assets to the tune of Rs 255.17 crore has been provisionally attached under PMLA.