Kolkata, February 17 (IANS). Kolkata Zonal Office, Directorate of Enforcement (ED) has filed a Prosecution Complaint (PC) against Krishna Damani before the Chief Judge, City Sessions Court, Kolkata under the Prevention of Money Laundering Act (PMLA), 2002 on 11 February 2026.
The Special Court has issued a notice to the accused under Section 223(1) of the Indian Civil Security Code (BNSS) 2023. The case pertains to misappropriation of funds of M/s South Point Education Society (SPES), which was initiated by an FIR lodged by the Kolkata Police. ED started investigation on this basis, which revealed large scale fund diversion.
Investigation revealed that SPES trustee Krishna Damani gained complete control over the Board of Trustees by sidelining other members. After gaining dominance over governance, he misused his position and transferred huge funds of the school to companies owned by him and his family members.
A total amount of more than Rs 20 crore was diverted under the guise of manpower service and other services. Investigation found that payments were made through fake vouchers, fake invoices and fake employee records. This included salaries of staff who never existed, while payments were made to Damani’s personal employees from the society/school account.
According to the ED, Damani also misused school funds to pay elite club membership fees, personal expenses and salary for the lockdown period, even making payments for services that were never provided. He distributed the money received from crime among his family members (wife, mother, daughters) and the companies he controlled in the form of inflated salaries, director fees, commission etc. After this, it was layered by investing it in mutual funds and other investments, thereby creating a web of money laundering.
The case is part of an ongoing investigation dating back to 2024, when Kolkata Police arrested Damani in February 2024. The allegations included misappropriation of over Rs 30 crore, in which funds were transferred through companies of relatives (such as Global Staffing Services and Pastille Mercantile). ED had also conducted search operations in September 2024. Damani was first sent to police custody, but later got bail.
ED’s investigation has revealed a serious case of using the funds of a charitable organization for personal gain. Further investigation is underway, in which more evidence is being collected. ED claims that more accused may come forward once the investigation is completed.
–IANS
SCH