A major financial fraud investigation involving the Tayal Group has come under the scanner of the Enforcement Directorate (ED), with the agency carrying out searches at 12 locations across Ahmedabad and Mumbai under the provisions of the Prevention of Money Laundering Act (PMLA).
The case involves an alleged ₹820.86 crore bank fraud and several companies, individuals and insolvency-related transactions. According to the information provided, the investigation names Tayal Group promoters and directors Praveen Tayal and Saurabh Tayal, along with resolution professionals Kiran C. Shah, Vinod P. Ambavat and company secretary Ravi Kapoor.
The ED’s investigation is looking into allegations that a network of companies and insolvency proceedings were used to move funds, create liabilities, reduce the role of banks and protect valuable properties.
Searches in Ahmedabad and Mumbai
The ED conducted searches at several locations linked to the people and companies under investigation.
The premises of Ravi Kapoor, who is described as a resolution professional and company secretary, were searched. His residence and office were among the locations covered by the agency.
A corporate consultancy firm located at Sahibaug Plaza in Ellisbridge, Ahmedabad, was also searched during the operation.
The searches were part of the ED’s investigation into the alleged financial transactions involving the Tayal Group and its associated companies.
215 bank accounts sealed
One of the major findings mentioned in the investigation is the use of companies that allegedly existed largely on paper.
According to the information provided, these companies were used to open 215 bank accounts. The ED has sealed all 215 accounts under Section 17(1-A) of the PMLA.
The investigation relates to companies including M/s Life Style Industries Ltd, M/s Actik Corporation Ltd and M/s Jaybharat Textile and Real Estate.
Together, the alleged transactions involving these companies amount to around ₹820.86 crore.
The ED also reportedly recovered ₹20 lakh in cash from the residence of Praveen Tayal.
During the searches, officers also found documents relating to various immovable properties that were allegedly kept away from the reach of banks.
Loans allegedly turned into NPAs
The investigation has also looked into the loans taken by companies belonging to the group.
According to the information provided, the group companies allegedly failed to repay new bank loans, resulting in the loans being converted into non-performing assets (NPAs).
The ED has further alleged that money connected with the suspected fraud was moved through shell companies and diverted into real estate.
One of the properties under investigation is the Express Mall in Nagpur, which is reportedly valued at around ₹483 crore.
Along with the mall, other immovable properties have also been placed under provisional attachment by the ED, according to the information provided.
Role of resolution professionals under investigation
The investigation also focuses on the alleged role of resolution professionals Ravi Kapoor, Kiran C. Shah and Vinod P. Ambavat.
According to the allegations, claims made by shell companies connected with the Tayal Group were allegedly accepted without proper verification and were shown at values higher than their actual worth.
The ED’s findings suggest that this allegedly reduced the voting power of banks during the insolvency process.
The allegations also involve the use of shell entities controlled by the Tayal Group as alleged fake creditors.
The investigation suggests that the insolvency process may have been used to protect the group’s assets rather than simply deal with financial distress.
Insolvency proceedings under scanner
According to the information provided, after certain properties were attached, the Tayal Group promoters allegedly planned to begin insolvency proceedings through their own shell companies under Section 9 of the Insolvency and Bankruptcy Code (IBC). The group allegedly presented companies under its control as creditors.
The alleged purpose was to use the insolvency process to protect the group’s properties. The ED is also examining claims that resolution professionals accepted these claims without proper verification. According to the allegations, this affected the voting power of banks and undermined the purpose of the insolvency proceedings.
Disputes over ED attachment orders
The investigation has also brought proceedings before courts and tribunals under the scanner.
According to the information provided, applications were filed before courts and tribunals seeking to cancel attachment orders issued by the ED.
It is also alleged that some orders that went against the interests of the parties involved were not disclosed.
Another issue being examined is the alleged attempt to prevent the ED from taking control of crores of rupees in rental income generated from properties that had been attached.
A second case with a similar pattern
The ED’s Ahmedabad office is also investigating another case involving the Tayal Group, where a similar pattern has reportedly emerged.
In this case, M/s Kaushar Textile, a Tayal Group company, allegedly started insolvency proceedings against another group company, M/s Vivan Reality, under the Insolvency and Bankruptcy Code.
During the process, M/s Cubical Reality Pvt. Ltd. was made the successful resolution applicant.
However, the arrangement raised questions under Section 29-A of the IBC, which sets out the eligibility requirements for a person or company to become a resolution applicant.
According to the information provided, the concern arose because ownership interests in the company were allegedly held by Praveen Kumar Tayal and Naveen Kumar Tayal.
The ED is now examining the connections between these companies, their insolvency proceedings and the movement of funds.
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