Assets worth the equivalent of around US$7.8 million have been seized from a company based in the Indian state of Rajasthan under anti-money laundering law in an alleged bank loan fraud case that involved fake letters of credit (L/Cs), India's Enforcement Directorate (ED) has said.

The ED has brought the case against Vikas WSP and its directors, B D Agarwal and Bimla Devi. The case is based on a Central Bureau of Investigation (CBI) probe into the company, its directors and officials of the State Bank of India.

Fake or forged

During investigations it was found that Vikas WSP secured an export packing credit (EPC) facility from the bank on the basis of "fake or forged L/Cs" and submitted "fake bills" to substantiate its application for the facility, the ED said in a statement.

"The bank later extended EPC to the company by negotiating 245 export bills against fake L/Cs under the foreign banking negotiating L/C scheme and also purchased 36 foreign bills," the directorate added.

Illegal purposes

Vikas WSP had obtained the EPC facility on consignments of exported goods, which were either not manufactured during the relevant time or were lying in the company's factory, by presenting fake bills of lading as proof of export, the ED alleges.

The EPC secured by the company was used to purchase fixed assets and provide working capital for the business, but the ED alleges some of the funds obtained under the facility were diverted for illegal purposes.

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