ED Arrests Maha Co-op Society Promoter In Fraud Linked PMLA Case

A special PMLA court in Mumbai sent Maha Co-op Society Promoter Suresh Kute to ED custody till January 10.

New Delhi:The Enforcement Directorate Thursday said it has arrested a promoter of a Maharashtra-based cooperative credit society which is alleged to have duped numerous investors for over Rs 2,400 crore.

Suresh Kute was taken into custody on January 7 as part of the investigation related to Dnyanradha Multistate Co-operative Society Ltd (DMCSL). A special Prevention of Money Laundering Act (PMLA) court in Mumbai sent him to ED custody till January 10, the federal agency said in a statement.

DMCSL was "managed and controlled" by Suresh Dnyanobarao Kute, Yashvant V Kulkarni and others. The company, according to the ED, floated various deposit schemes and claimed to provide interest ranging between 12-14 per cent.

"Kute and others lured more than 4 lakh gullible investors to deposit money with DMCSL by promising higher returns." "However, no payment or only partial payments were made to the investors when the deposits were matured, resulting in them being cheated," it said.

The agency alleged that the funds of DMCSL were "embezzled" by the management of the society and Kute and others hatched a "criminal conspiracy" to "fraudulently" divert funds worth Rs 2,470 crore in the guise of loans to various companies of the Kute Group (group of companies beneficially owned by Kute and his wife Archana Kute)."

Probe found that after the disbursement of these fraudulent loan amounts, money was "siphoned off" by the promoters through several accounts of the entities of Kute Group or directly in the form of cash, it said.

The funds received from the society were further utilised for the personal benefits of the promoters (including Kute) like investment in new businesses, purchasing properties and personal expenses, the ED claimed.

The agency conducted multiple searches in this case last year and has attached properties worth more than Rs 1,400 crore till now.