ED to restore Rs 15,000-cr assets to victims of financial frauds in FY26

The Enforcement Directorate (ED) is gearing up to restore assets worth Rs 15,000 crore to victims of financial frauds in 2025-26.

The agency, which investigates money laundering and foreign exchange violations, has so far returned assets valued at Rs 30,102 crore to victims of fiscal forgery. The victims include individuals who invested in Ponzi schemes and banks that loaned to fugitive economic offenders like Vijay Mallya and Nirav Modi.

Seized from fugitives

The returned assets, including prime properties or jewellery, were confiscated from the fugitives as well the promoters and directors of the companies that committed frauds.

Also read | Kodakara hawala case: How ED's clean chit to BJP has pitted CPI(M) against Union govt

The latest restitution order came on March 24 involving a bank fraud. ED officials told The Federal a company, GS Oils Ltd, along with others, availed credit facilities from the State Bank of India (SBI) on the basis of forged documents.

But the said loan, ED investigators found, was diverted back to the cash credit account of GS Oils and withdrawn in cash.

Loss to SBI

The company failed to repay the money to the bank, leading to a loss of Rs 97.55 crore to SBI. During the investigation, assets in the name of GS oils and its directors were attached by the ED under the Prevention of Money Laundering Act (PMLA).

A special court on March 24 ordered restitution of assets worth Rs 62.30 crore to SBI.

Section 8(8) of the PMLA states that if a property has been confiscated by the government, the special court can direct its restoration to a claimant “who has a legitimate interest in the property and has suffered a quantifiable loss as a result of an offence of money laundering”.

Also read | DMK MP Jagathrakshakan in ED crosshairs over Rs 20-crore ‘suspicious’ transaction

Ponzi scam

In the Rose Valley Ponzi scam, the Asset Disposal Committee (ADC) formed by the Calcutta High Court has got 31 lakh applications from the victims of the chit fund fraud.

Now assets worth Rs 450 crore have been given to the ADC for restitution. The committee has restored assets to some 32,000 investors who were defrauded by the Rose Valley group through Ponzi schemes.

ED officials say that in 2019 and 2021, restitution to the tune of Rs 15,201 crore was done and it mainly pertained to cases of Vijay Mallya and Nirav Modi.

Mallya, Modi cases

In Mallya’s case, investigators have alleged that a consortium of banks lent around Rs 6,777 crore to his now defunct Kingfisher Airlines.

They found that the loans were sanctioned to the airline in connivance with top officials of banks despite its weak financials, negative net worth, low credit rating and ineligibility for such a large amount of loan.

Three court orders in 2020-21 led to the restoration of assets worth Rs 14,131 crore to the banks in this case.

In the case of Nirav Modi, the ED restored assets worth Rs 1,052 crore to Punjab National Bank, which had lent money to the fugitive diamantaire. In all, the ED has restored assets in 33 cases thus far.

2025 bounty

Stressing that they are now focusing on restoring assets to individual victims, ED officials say out of 33 cases, restitution has been done in 19 pertaining to Musaddilal Jewellers (Rs 160 crore), Palpap Ichinichi Software International Ltd (Rs 1.41 crore), Pen Cooperative Urban Bank (Rs 289.54 crore), Pixion Media (Rs 100 crore), Sheetal Refineries (Rs 53.12 crore), CSI Medical College (Rs 89 lakh), SRD Commercial (Rs 10.48 crore), Saravana Stores (Rs 235 crore), Shri Guru Raghavendra Sahakara Bank (Rs 50 crore), TV Krishna Rao (Rs 1.02 crore), Agri Gold Group (Rs 6,000 crore), PSL Ltd (Rs 274 crore), GDS Builders (5.17 crore), Rose Valley Ponzi scam (Rs 450 crore), ST Impex (Rs 13.58 crore), Aryarup Tourism (Rs 52.83 crore), Ambidant Marketing (Rs 3.8 crore), Lamjingha Finance (Rs 63 crore) and GS Oil (Rs 62.30 crore).

All this happened since January 1 this year.

In fiscal 2024-25, the ED restored assets worth Rs 14,901.13 crore.