Mumbai: In a significant development following the Infrastructure Leasing & Financial Services Ltd. (IL&FS) scam involving its group companies, the Special Court under the Prevention of Money Laundering Act (PMLA) in Mumbai has allowed the restoration of attached assets worth Rs952 crore belonging to Vadraj Cement Limited.
The assets, which include a major cement plant in Surat, will be handed over to Nuvoco Vistas Corporation Ltd., a subsidiary of the Nirma Group and the successful resolution applicant under the Insolvency and Bankruptcy Code (IBC). The order, dated June 25, 2025, was passed after the Enforcement Directorate (ED) issued a No Objection Certificate (NOC), having earlier attached the properties during the course of its money laundering investigation.
According to ED official statement, the move is part of ED’s broader initiative to return seized assets to legitimate claimants and enable financial institutions to monetize productive assets. The restoration is aimed at accelerating economic recovery and ensuring efficient use of such properties.
The ED’s Mumbai Zonal Office launched its investigation under PMLA against IL&FS, its group companies, and associated entities for their alleged role in laundering proceeds of crime (POC). Investigators found that Vadraj Cement Ltd. (formerly ABG Cement Ltd.), an ABG Group entity, had fraudulently obtained loans amounting to Rs 952 crore from IL&FS Financial Services Ltd. (IFIN),which was later declared as a non-performing asset.
The agency’s wider investigation into the larger IL&FS scam, one of India’s most complex financial frauds, uncovered a web of irregularities, misrepresentation of financial statements, and diversion of funds across group companies.The probe revealed that loans amounting to Rs 952 crore had been fraudulently obtained by Vadraj Cement and were identified as proceeds of crime(PoC). Vadraj Cement had secured multiple loans from IFIN, a subsidiary of IL&FS, which later turned sour. Punjab National Bank led the list of creditors with a claim of Rs 2,122 crore, followed by Union Bank of India (Rs 1,620 crore), Indian Overseas Bank (Rs 1,419 crore), Central Bank of India (Rs1,391 crore), and JC Flowers ARC (Rs 677 crore).
In 2020, the ED provisionally attached the company’s immovable assets, including its Surat cement plant. The attachment was confirmed by the Adjudicating Authority in 2021. A Prosecution Complaint (PC) was also filed before the Special Court (PMLA), Mumbai, seeking confiscation of the attached assets.
During the corporate insolvency resolution process, Nuvoco Vistas Corporation Ltd. emerged as the successful bidder and submitted a resolution plan, which was approved by the National Company Law Tribunal (NCLT), Mumbai, on April 1. As part of the acquisition deal, Nuvoco committed to pay Rs 1,706 crore to financial creditors as part of its acquisition deal.
In view of the NCLT order and in keeping with the objectives of PMLA to restore properties to genuine third-party claimants, the ED filed a No Objection Certificate (NOC) before the Special Court. On June 25, the court directed the restoration of attached properties to Nuvoco under Sections 8(8) and 8(7) of the PMLA, read with Rule 3A of the PML (Restoration of Property) Rules, 2016.
The court also directed Nuvoco to furnish an undertaking that it would return or restore the property or its value in the event of future directions. ED has been instructed to prepare a comprehensive inventory of the property prior to handing over possession.
