Insolvency and Bankruptcy Code 'misuse' case: ED conducts searches at several locations in Kolkata

The Enforcement Directorate (ED) carried out searches at twelve locations in Kolkata on September 30, 2026, as part of an investigation into money laundering allegations against a Kolkata-based group. The group, the Tayal Group, is accused of defrauding banks of over ₹820 crore through fraudulent practices. These practices included false declarations about production capacity and machinery, falsified stock statements, and unauthorized sales of hypothecated machinery.

The ED alleged that the company and its representatives did not respond to requests for comment. This action follows ED Director Rahul Navin's directive to investigators to intensify efforts under anti-money laundering laws, particularly in cases of misuse and fraud under the Insolvency and Bankruptcy Code (IBC). The ED claims the Tayal Group allegedly layered the loan amount through promoter-controlled shell entities and siphoned funds into real estate assets, including the Empress Mall in Nagpur.

The mall was attached under the Prevention of Money Laundering Act (PMLA) in May 2019, and proceedings under the Corporate Insolvency and Resolution Process (CIRP) were initiated against a corporate guarantor, KSL & Industries Limited, which is closely tied to the Tayal Group. The ED alleges that the Resolution Professionals (RPs) involved in the process misused the IBC by admitting unverified claims from promoter-linked shell entities without proper verification.

They claim the RPs acted as agents of the promoters by filing applications to set aside PMLA attachments, suppressing adverse orders, and concealing the ED's physical possession of the Empress Mall from the courts.