The Enforcement Directorate (ED) has conducted searches in Mumbai and Hyderabad in connection with a case against G.V.K. Reddy , promoter of the GVK Group and whole-time director of the Mumbai International Airport Limited (MIAL), and others.
The ED searches have been carried out on the premises linked to the persons who have been accused of causing a loss of over ₹705 crore to the exchequer.
The agency has initiated the money laundering probe based on a corruption case registered by the Central Bureau of Investigation (CBI).
Unknown officials of the Airport Authority of India (AAI) are also under the CBI scanner for ignoring the alleged diversion of funds and other financial irregularities.
The MIAL, its managing director and Mr. Reddy’s son, Venkata Sanjay Reddy, GVK Airport Holdings Limited and several other associated private companies have been named.
It is alleged that the funds meant for the development of the airport in Mumbai were siphoned off from 2012 to 2018.
The AAI had formed a joint venture by the name of the MIAL for the modernisation, upgrade and maintenance of the Mumbai airport. While 50.50% of its shares was with the GVK Airport Holdings Limited, 26% was with the AAI and the remaining with foreign entities.
On April 4, 2006, the AAI had an agreement with the MIAL for the development works.
Bogus contracts
As alleged, funds were diverted by showing execution of bogus contracts related to the development of about 200 acres of land parcel around the airport. It was meant to expand avenues for revenue generation.
The contracts, purportedly given to several private companies, were never executed.
The reserve or surplus funds of about ₹395 crore were allegedly kept as fixed deposits in banks, on the basis of which credit facilities were arranged for Hyderabad-based group companies.
The accused also shifted the staff of the GVK Group head office in Hyderabad and the employees of group firms on to the payrolls of the MIAL.
Besides, the MIAL’s revenue earnings were under-reported. It is alleged that the promoters allotted premium retail areas of Mumbai airport to the companies owned by their family members, relatives and employees at much cheaper rates.
