Chandigarh: The ED arrested a company’s top official in a case related to causing Rs 155 crore loss to banks using Foreign Letters of Credit (FLCs) for creating a mirage of fake import of timber from Singapore, an official said on Friday.
The Directorate of Enforcement (ED), Chandigarh Zonal Office, arrested Deepak Singla of Mahesh Timber Pvt Ltd under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002, on May 18, 2026.
Subsequently, transit remand was taken from Rouse Avenue Court, Delhi, and a 6-day remand was taken from Special PMLA Court, Panchkula. Thereafter, Singla was sent to judicial custody for 14 days on May 26, said the ED.
The ED initiated an investigation based on an FIR registered by the CBI, Banking Securities and Fraud Branch, New Delhi, against Mahesh Timber, its directors, and others for offences under the IPC, 1860 and the Prevention of Corruption Act.
The case pertains to fraudulent enhancement of Foreign Letters of Credit (FLCs) by unauthorised SWIFT amendments without corresponding entries in Finacle, causing wrongful loss of approximately Rs 155.21 crore to Oriental Bank of Commerce and consortium banks.
The ED investigation revealed that Mahesh Timber, in conspiracy with associated entities and persons in India and Singapore, fraudulently transferred funds amounting to approximately Rs 195.02 crore through manipulated FLCs without any genuine import of timber.
Verification by the Customs authorities established that a substantial number of Bills of Entry and Bills of Lading submitted to banks were forged and fabricated, said the ED.
The investigation further revealed that Amazon Exports Pte Ltd, Mahesh Timber Singapore Pte Ltd, Traffic Media India Pvt Ltd, shipping firms like BVM Shipping PTE Ltd and Pearl Maritime PTE Ltd, Traffic Media Pvt Ltd were used as nexus of firms in creating a mirage of fake import of timber from Singapore to India to manipulate OBC Bank to fraudulently open and transfer enhanced value of FLCs to Singapore against such fake imports, the ED said.
The role of Singla has emerged prominently during the investigation. He is closely associated with Ashok Kumar Mittal and Raman Singhal and held directorial/key managerial positions in Mahesh Timber, Mahesh Resources and Traffic Media India during the relevant period, said the ED.
Investigation has revealed sham transactions relating to the purported sale and purchase of imported timber despite the absence of genuine imports, said the ED.
Further investigation has also revealed the involvement of Harish Singla, who was associated with entities providing guarantees and financial backing to Mahesh Timber, and who held key managerial roles in companies controlled by Ashok Kumar Mittal, the ED said.
Accordingly, search operations were conducted under Sec 17 of PMLA, 2002 at the premises linked to Deepak Singla, Ayush Tiwari, Amreek Singh Gill and others on May 18 in Delhi and Goa.
During the search operation, unaccounted cash of Rs 27.75 lakh and 6,000 Singaporean Dollars, along with ledgers of accused firms, incriminating documents and electronic devices were seized, said the ED.
(IANS)
