Days after the Chandrababu Naidu government had denied General Consent to the CBI to operate in the State for alleged witch-hunting, the Enforcement Directorate (ED) on Saturday allegedly unearthed a huge fraud by TDP Rajya Sabha MP and former Union Minister YS Chowdary.
The ED said in a tweet, “Searches under Prevention of Money Laundering Act (PMLA) were conducted in case of Sri Y.S.Chowdary, MP of Andhra Pradesh to investigate #bankfraud of over ₹6,000 crore by more than 120 shell companies controlled by Sri Y.S.Chowdary. Searches resulted in recovery of incriminating documents & 6 high valued luxury cars purchased by Shri Y S Chowdary in the name of shell companies.”
Mr. Chowdhary had been asked to join further investigation through summons for his appearance on Tuesday. The documents recovered by the ED revealed that the group companies were facing various FEMA/DRI/CBI cases. Besides forex transactions, the documents indicated that most of the more than 120 companies the group was operating had no genuine business activities. Preliminary statements indicated that certain loans to the group were sanctioned against the personal guarantee of Sri Y.S.Chowdary. At his residential premises, six high end cars (Ferrari, Range Rover, Benz etc.) were found registered in the name of dummy companies. These vehicles had been seized under the provisions of the PMLA.
As per the ED information, the Banking Securities and Fraud Cell (BS & FC) of the CBI, Bengaluru, registered three FIRs based on complaints from three banks stating that a loss of ₹364 crore had been caused to the consortium of banks (the Central Bank of India ₹133 crore, the Andhra Bank ₹71 crore and the Corporation Bank ₹159 crore) by M/s Best & Crompton Engineering Projects Ltd, Chennai (BCEPL) through loans by falsification of accounts and submission of false statements. The Directorate of Enforcement, Chennai, had initiated investigation.
The ED also said, “BCEPL, along with other group companies of Sujana Group were functioning under the Chairmanship of Shri Y.S. Chowdary @ Y. Satyanrayana Chowdary @ Sujana Chowdary, who is a sitting Member of Parliament-Rajya Sabha, representing Telugu Desam Party. Investigations revealed that all the Directors of various Sujana Group Companies act under the instructions of Shri Y.S. Chowdary, which is evidenced by the email correspondences and communications recovered from the business/residential premises of Directors of BCEPL. Further, in their voluntary statements tendered under Section 50 of PMLA, directors of BCEPL had inter alia stated that Shri Y.S. Chowdary is the person responsible for the entire activities of Sujana Group of Companies and that they all have acted/rendered their signatures on the insistence of Shri Y.S. Chowdary, either directly or through CFO & CS of Sujana Group of Companies and that they are namesake Directors and as such they had no idea as to how the funds of BCEPL were utilised and that the entire operations/transactions of Sujana Group of Companies are known only to above key persons.”
Searches at eight locations
The ED conducted searches at eight locations (seven in Hyderabad and one in Delhi) of the Sujana group on Friday.
Stating Mr. YS Chowdary had been running several firms at the group’s Hyderabad facility, the ED said, “As part of these investigations, searches had earlier been conducted on 08.10.2018 at residential and office premises of the key officials of BCEPL at Chennai, Bengaluru and Hyderabad. Certain incriminating documents were recovered and seized for further investigation.” Searches also resulted in the recovery and seizure of 126 rubber stamps of various shell companies from the business premises at Plot No.18, Nagarjuna Hills, Panjagutta, Hyderabad-500082, according to the ED.
Group denies notices
The group in an official release denied that look out notices were issued against its directors. It, however, said the ED had sought some documents and information related to a 10-year-old case and the same was fulfilled by it.
The TDP government, after a series of searches by the CBI on some of the party leaders, had withdrawn the General Consent to it to conduct probes in the State.
