ED searches in ₹350-crore Hythro Power bank fraud case

The Enforcement Directorate (ED) has conducted searches at multiple locations in and around Delhi, Chennai, and Bengaluru in connection with the alleged ₹350-crore Hythro Power and Controls Ltd. (HPCL) bank fraud case.

According to the agency, five premises were searched in and around Delhi, three in Chennai, and one in Bengaluru. The case is based on a First Information Report registered by the Central Bureau of Investigation against HPCL and its promoters.

“The accused, including HPCL and its directors Amul Gabrani and Ajay Kumar Bishnoi, are alleged to have siphoned off and diverted funds to their related entities and related entities of HPCL, causing substantial losses to the banks. Frauds declared by the complainant banks amount to ₹346.08 crore from multiple banks,” the agency said.

The affected banks include Punjab National Bank (₹168.07 crore), ICICI Bank (₹77.81 crore), Kotak Mahindra Bank (₹44.49 crore), and Union Bank (₹55.71 crore). The alleged offence pertains to the period between 2009 and 2015.

Operating in the power transmission and distribution sector, HPCL was engaged in designing, manufacturing, and constructing turnkey projects for transmission lines. “HPCL, through its promoters/directors, obtained credit facilities from Punjab National Bank totalling ₹165.71 crore under a multiple banking arrangement,” the ED said.

Despite multiple rounds of restructuring, including conversion of invoked bank guarantees into funded interest term loans, HPCL defaulted. The loan account was declared a Non-Performing Asset on March 31, 2015, and later reported as fraud to the Reserve Bank of India on June 13, 2024.

A forensic audit revealed that HPCL siphoned funds through related/group entities such as Avadh Transformers Pvt. Ltd., G.E.T. Power Pvt. Ltd., Revolution Infocom Pvt. Ltd., and Tecpro Engg. Pvt. Ltd. The transactions involved “fictitious job work, unpaid receivables, and circular transactions,” the agency said, adding that several large advances and sale invoices remained unrecovered for years.

The ED also alleged that HPCL used related companies to divert funds and misappropriate assets, leading to erosion of creditor interests.