Editor’s Note
This report details a recent enforcement action against alleged financial misconduct, highlighting the diversion of business loans for personal luxury. It serves as a reminder of the legal consequences for such fraudulent activities.
The Enforcement Directorate (ED) has carried out a major operation under the Prevention of Money Laundering Act (PMLA), 2002, conducting simultaneous raids across six locations in Ahmedabad on October 8 and 9. The searches were part of a bank fraud case involving a businessman who allegedly diverted a ₹10.95 crore business loan meant for trade expansion toward luxury spending, gold purchases, and personal indulgences.
The case originated from a complaint lodged by the Oriental Bank of Commerce (now merged with Punjab National Bank), which accused businessman Ranjit Kumar J. Loonia of obtaining loans fraudulently through his three firms — Shree Om Fab, Shree Baba Textile, and Shree Laxmi Fab. The firms, reportedly engaged in the grey cloth business, allegedly submitted forged documents and falsified financial records to secure cash credit facilities.
ED’s investigation revealed that instead of using the funds for legitimate business purposes, Loonia diverted a substantial portion of the loan toward repaying his personal home loan, purchasing real estate, gold, silver bullion, and jewelry, and making large cash withdrawals. The fraudulent misuse of the bank loan caused an estimated loss of ₹10.95 crore to the lender.
During the raids, ED officials recovered several incriminating documents, digital data, property papers, and transaction records from multiple premises linked to the accused. The agency also seized gold and diamond jewelry worth around ₹3 crore from bank lockers and froze fixed deposits worth ₹23 lakh under Section 17 of the PMLA.
The investigation further found that the accused showed fake sales and transfers of funds across different accounts to conceal the origin of the money and make it appear legitimate. These transactions were designed to launder the illicit proceeds generated from the bank loan — a clear violation under the PMLA provisions. ED officials are now examining the trail of these funds to identify other individuals or entities involved in the laundering network.
a senior ED officer said.
The ED is currently analyzing both the digital and physical evidence recovered during the raids. According to officials, the valuation of the seized properties and assets is underway, and a prosecution complaint (charge sheet) will soon be filed in court.
Authorities also indicated that this operation is part of a broader crackdown, targeting similar cases where bank loans have been misused for personal enrichment rather than genuine business purposes.
The Ahmedabad operation sends a strong signal that the ED will continue to act decisively against money laundering, loan frauds, and misuse of public funds.
Government sources stated that the agency is keeping close watch on cases where corporate or business loans may have been diverted for private gains. This action aligns with the government’s “Zero Tolerance Policy” toward financial crimes and corruption.
In essence, this case highlights that no matter how sophisticated the financial manipulation may be, evading the ED’s scrutiny and the rule of law is now virtually impossible.