ED arrests CEO of Mumbai-based firm for money laundering to the tune of Rs 47 crore

The ED said that it wants to probe the utilisation of the loan amount, claiming that it was used to maintain a lavish lifestyle. (File photo)

The Enforcement Directorate Tuesday arrested Prateek Kanakia, CEO and founder of a Mumbai-based firm The Greenbillions Limited for alleged money laundering to the tune of Rs 47.32 crore by misappropriating and diverting loans for personal gains and misusing government funds. The ED said that it wants to probe the utilisation of the loan amount, claiming that it was used to maintain a lavish lifestyle. Kanakia was sent to ED’s custody till January 9 by a special court in Mumbai.

“A substantial portion of the loan proceeds was utilised to finance and maintain a lavish lifestyle, including the use of luxury vehicles and high-end residential premises situated in prime localities of Mumbai and Delhi. These properties and assets, though not owned by him, were used to create a false impression of financial prosperity and business success,” the ED has said in its remand plea.

The ED alleges that Kanakia through his private firm in connivance with former employees of Broadcast Engineering Consultants India Limited (BECIL), fraudulently availed credit facilities in the name of the Pune Waste Management Project of the Pune Municipal Corporation by using forged and fabricated documents. “…Prateek Kanakia misused government funds received from BECIL, with no intention of executing the Pune PMC project. In connivance with other associates and vendors, the loan amount was misappropriated, causing financial loss to BECIL and irrecoverable delay to the project. Pune PMC officials confirmed that no work was undertaken at the project site,” the ED alleged.

The CBI had previously arrested former top officials of BECIL, which comes under the Ministry of Information and Broadcasting. The ED probe against Kanakia is based on a CBI case filed in 2024 alleging cheating, forgery and other charges of the Indian Penal Code and Prevention of Corruption Act.

In 2018, the PMC had issued an expression of interest to set up and operate a waste-to-energy plant. The project was awarded to a company named Variate Consultants in 2019 and in 2020 a concession agreement was entered into by the PMC and a subsidiary company of Variate.

Kanakia’s firm had subsequently entered into a binding term sheet to acquire the subsidiary company and approached BECIL to form a consortium and act as a project management consultant and financial partner for the PMC project. In 2022, a short-term loan of Rs 80 crore was sanctioned to BECIL Indian Renewable Energy Development Agency Limited. It was alleged that BECIL further sanctioned Rs 50 crore of the loan amount to Kanakia’s firm. The ED alleges that disbursement of the loan was done without complying with the stipulated conditions.

Kanakia, through his lawyers, denied the allegations before the court and said that the case was based on documentary evidence, hence his custodial interrogation was not needed.