Electrotherm ED provisionally attaches Rs 25.08 crore

Electrotherm (India) Limited said the Enforcement Directorate provisionally attached and froze Rs 25.08 crore in two company bank accounts on September 25, 2026, while also attaching equity shares held by Executive Vice Chairman Shailesh Bhandari and former chairman Mukesh Bhandari. Electrotherm and Shailesh Bhandari have challenged the action before the Gujarat High Court.

What did the ED attach at Electrotherm?

The Enforcement Directorate, or ED, provisionally attached Rs 25.08 crore in two Electrotherm bank accounts and attached and froze equity shares held by Shailesh Bhandari and Mukesh Bhandari. The Provisional Attachment Order was dated September 25, 2026 and issued under Section 5(1) of the Prevention of Money Laundering Act, 2002, or PMLA.

Electrotherm did not disclose the number of shares affected, their value, the identities of the two bank accounts, or whether the Rs 25.08 crore also represents the value of the attached promoter shares. The November 4, 2026 financial-results filing establishes that the order covered both company funds and the shareholdings of the two named promoters.

The Rs 25.08 crore amount also appears in Electrotherm’s standalone cash-flow statement for the six months ended September 30, 2026. The statement records Rs 25.08 crore as an increase due to a lien on balances in current accounts, linking the attachment to a reported restriction on working-capital balances.

Why did the ED take action against Electrotherm?

The September 2026 attachment followed an ED investigation related to a complaint by Bank of India, according to Electrotherm’s disclosure. ED’s Ahmedabad zonal office conducted searches in January 2025 and froze bank accounts of Electrotherm and Shailesh Bhandari at that stage.

The Gujarat High Court had earlier allowed operation of the bank accounts and release of a seized car during the investigation, subject to a fixed deposit receipt, or FDR, being furnished in favour of ED. The November 4 filing does not state the FDR amount or whether that earlier permission continued after the September 25, 2026 attachment order.

ED subsequently filed a complaint under Sections 44(1)(b) and 45(1) of the PMLA before the Special Court for PMLA Cases in Ahmedabad. Electrotherm identified Shailesh Bhandari as promoter and Executive Vice Chairman, and Mukesh Bhandari as promoter and former chairman, in relation to the complaint.

Has Electrotherm challenged the ED attachment order?

Electrotherm and Shailesh Bhandari have challenged ED’s action, including the freezing of the company’s bank accounts and the equity shares held by the two promoters, before the Gujarat High Court. The matter was pending adjudication and listed for further hearings when the board approved the September-quarter results on November 4, 2026.

The filing says the Special Court supplied a copy of the PMLA complaint to Electrotherm and Shailesh Bhandari on August 3, 2026. This followed notices issued under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023, for a hearing on cognizance.

The disclosure records no High Court decision on the merits of the September 25 order and gives no date for the next hearing. It also does not say that the attachment has been withdrawn, modified or confirmed, leaving the Rs 25.08 crore restriction and the promoter-share freeze subject to the pending proceedings.

How does the attachment compare with Electrotherm’s financial position?

The Rs 25.08 crore lien exceeded Electrotherm’s Rs 16.34 crore of cash and cash equivalents at September 30, 2026, although the company reported Rs 81.66 crore of other bank balances. Those balance-sheet lines do not identify the two attached accounts, but they provide the disclosed context for the amount recorded as a lien.

Electrotherm reported a standalone net loss of Rs 20.06 crore for the quarter ended September 30, 2026, compared with net profit of Rs 6.86 crore in the quarter ended June 30, 2026. For the six months ended September 30, 2026, it reported a Rs 13.20 crore net loss against Rs 5.97 crore profit in the corresponding six months of 2025.

Separate from the ED action, Electrotherm reported defaults of Rs 56 crore of instalments to Invent Assets Securitization and Reconstruction Private Limited from the quarter ended September 30, 2025 to September 30, 2026. Related interest of Rs 3.81 crore was due from March 31, 2026 to September 30, 2026, and management said it was negotiating a rescheduling with the asset reconstruction company.

What other disclosed matters affect Electrotherm’s results?

Electrotherm’s statutory auditor retained a qualification over interest not provided on a loan assigned to Rare Asset Reconstruction Limited, or Rare ARC. The auditor said the unprovided interest understated the September 2026 quarter’s net loss by Rs 41.70 crore and the six-month net loss by Rs 82.16 crore.

The filing says total liability to Rare ARC and retained earnings or loss at September 30, 2026 were understated by Rs 1,148.28 crore. Indian Overseas Bank had classified the loan account as a non-performing asset in August 2011 for a defaulted amount of Rs 189.96 crore, and Electrotherm said it had not entered a settlement agreement with Rare ARC as of the report date.

Electrotherm also disclosed pending enquiries, notices, summons, litigation, recovery and fraud proceedings concerning the company and its directors before the Debt Recovery Tribunal, Central Bureau of Investigation, ED, Ministry of Corporate Affairs, tax departments and courts. The filing gives no monetary estimate for those separate matters, so their individual financial effects cannot be quantified from the November 4, 2026 disclosure.

Conclusion

The September 25, 2026 ED order provisionally attached Rs 25.08 crore in two Electrotherm bank accounts and froze shares held by Shailesh Bhandari and Mukesh Bhandari. The company recorded an equivalent lien on current-account balances in its six-month cash flow, alongside a reported Rs 20.06 crore quarterly net loss and disclosed debt-payment issues.

The next disclosed event to watch is the Gujarat High Court hearing on Electrotherm and Shailesh Bhandari’s challenge to the ED action. Management’s negotiations over Rs 56 crore of Invent ARC instalment defaults and the unresolved Rare ARC interest provision of Rs 1,148.28 crore also remain matters identified in the September 2026 results.