From Dubai to Bhopal: How did SBI lose Rs 1,266 crore in alleged AOPL fraud?

The Enforcement Directorate (ED) has attached nine high-value properties in Dubai under the Prevention of Money Laundering Act (PMLA) in connection with a major bank fraud case involving the State Bank of India (SBI).

The attached assets, valued at Rs 51.70 crore, include luxury apartments and commercial buildings located in Centurion Residence – Dubai Investment Park Second, Dubai Silicon Oasis, Liwa Heights (Al Thanyah Fifth), Business Bay, and World Trade Centre Residences.

The investigation centres on Advantage Overseas Private Limited (AOPL), its directors, guarantors, and related entities, including its main director and significant beneficial owner, Shrikant Bhasi. The alleged bank fraud caused a wrongful loss of Rs 1,266.63 crore to SBI’s Shahpura branch in Bhopal. The ED stated that Bhasi exercised “strategic” control over AOPL and its associated entities and later transferred the Dubai properties to his daughter through gift deeds executed between 2022 and 2023.

The agency alleged that the properties were acquired using proceeds generated from illegal merchanting trade transactions, diversion of bank funds, fabrication of documents, circular trading, and layering of illicit proceeds. Twelve Foreign Letters of Credit (FLCs) worth USD 200 million (approximately Rs 1,266.63 crore) devolved upon SBI between April and May 2018 after AOPL failed to meet mandatory margin requirements and could not infuse funds during LC rollover. The depletion of fixed deposit margins and the company’s failure to honour obligations forced SBI to make payments to overseas suppliers, resulting in substantial losses.

The ED stated that these devolved LCs constitute a significant portion of the proceeds of crime, which were subsequently laundered through related entities and used to acquire foreign assets. A provisional order under the PMLA has been issued to attach the properties as part of the ongoing investigation.
(With PTI inputs)