The Enforcement Directorate on Monday has provisionally attached 28 immovable properties and other assets worth about ₹ 80.65 crore belonging to TRS leader and Khammam MP Nama Nageshwar Rao and his family members in an ongoing money laundering case.
The ED is investigating alleged financial violations by M/s Ranchi Expressway Ltd, Madhucon Projects Limited and its director and promoters under the provisions of Prevention of Money Laundering Act, 2002.
Mr. Nageshwar Rao is promoter and director of Madhucon group of companies and also a personal guarantor to the bank loan defaulted by the company. ED has attached the registered office of Madhucon group of companies and residential property at Jubilee Hills, Hyderabad.
The attached immovable assets of ₹ 67.08 crore are at Hyderabad, Khammam and at Prakasam district in Andhra Pradesh. Movable assets of ₹ 13.57 crore include shareholding of Mr. Nageshwar Rao and his family members in M/s Madhucon Projects Ltd, M/s Madhucon Granites Limited and in other Madhucon group of companies.
Earlier in July, ED had provisionally attached 105 immovable properties and other assets worth about ₹ 73.74 crore belonging to Madhucon Group, after conducting multiple searches and recording multiple statements of promoters, sub-contractors, bankers, engineers and forensic auditors.
According to the ED, investigation thus far has revealed that Madhucon Group promoters siphoned off the loan funds of the project by taking the entire EPC contract from its special purpose vehicle (SPV), and then taking huge mobilisation and material advances.
Instead of using the advances for the work, they used it in their other projects. And direct cash of ₹ 75.50 crore was generated by paying money and then receiving back the amount through six shell entities such as M/s. Usha Projects, M/s Shree BR Visions, M/s. Sri Dharma Sastha Constructions, M/s. Sree Nagendra Constructions, M/s. Ragini Infrastructure and, M/s. Varalakshmi Constructions, it said.
All the said shell companies, it added, were completely under the control of Nageshwara Rao and Mr. Nama Seethaiah. The sub-contractors did no work, had no sufficient expertise and were based in AP and Telangana, whereas the project was in North India.
They took large advances from MPL from the loan funds and then paid back huge amounts to Madhucon Group on the pretext of using the equipment and labour of Madhucon Group, and so the funds came back to Madhucon Group.
The ED said it has identified a direct diversion of ₹ 361.29 crore from the bank loan obtained by Ranchi Expressways Limited.
A full investigation is underway.
