ED returns Rs 164 cr properties to SBI in major fraud case

CHENNAI: In a significant development in a Rs 380 crore bank fraud case, the Enforcement Directorate (ED) has restituted 27 immovable properties valued at approximately Rs 163.85 crore to the State Bank of India (SBI). The action was taken under the Prevention of Money Laundering Act (PMLA), 2002, following an order from the Principal Sessions/Special Court in Chennai.

The properties were returned in connection with the money laundering investigation into Nathella Sampath Jewellery Pvt Ltd (NSJPL) and its promoters. The ED's probe was initiated based on a CBI FIR registered in March 2018 on a complaint from SBI, which led to a consortium of three banks that had extended a Rs 380 crore loan to NSJPL.

The banks alleged that the accused entity deliberately diverted the loan funds for unintended purposes and personal gains, instead of using them for business, resulting in a wrongful loss and default on repayment.

During its investigation, the ED found that the promoters of the jewellery firm used a web of entities to layer and route the illicitly obtained loan funds. Based on the evidence, the agency had previously attached 37 properties worth Rs 328.44 crore in July 2018, representing the value of the "proceeds of crime."

A prosecution complaint was filed by the ED in the special court in July 2019. The court framed charges in the case on October 28, 2024, and the trial is currently underway.

During the trial, SBI filed an application seeking restitution of 27 of the attached properties, asserting its first right as a financial creditor under the SARFAESI Act. The ED supported SBI's application, noting that the bank was the victim of defrauding by NSJPL. The special court, invoking its powers under the PMLA, ordered the release of the properties to SBI on September 12, 2025.