CHENNAI: The Enforcement Directorate (ED) alleged that evidences recovered during recent searches against the relatives of Minister KN Nehru pointed to a 'deep-rooted' and 'systemic corruption network' within the Municipal Administration, Urban and Water Supply department.
The ED has also alleged that the illicit funds were layered and siphoned through interconnected entities using several hawala transactions.
The agency had conducted searches across Chennai, Tiruchy and Coimbatore on April 7 under the Prevention of Money Laundering Act (PMLA) in 15 premises associated with Truedom EPC India Pvt Ltd and its key personnel.
These searches were not based on any predicate offence case filed in relation to alleged corruption in the MAWS department.
Instead, it was based on an ECIR that ED has filed based on a 2021 CBI FIR alleging that Rs 30 crore of loan taken by the firm for a 100 MW power project had been diverted through shell entities to the True Value Home (TVH) group owned by Nehru’s brother, KN Ravichandran.
However, Minister Nehru was not included in this case.
ED said its investigations revealed that Truedom was a shell entity with no wind energy experience and was created solely to divert loan funds under the guise of the windmill project.
It also said that the funds were immediately routed through associated shell entities with 'no real' activity, and following layering, substantial amounts were transferred to TVH Homes Pvt Ltd and TVH Energy Resources Pvt Ltd to settle their existing liabilities.
The setup, including fake project agreements and paper entities, was designed to mask the diversion, with no repayment effort made before the loan was declared fraudulent, ED said.
During the search operations, various incriminating documents, digital records, and property documents were seized, indicating the layering and siphoning-off of funds.
Notably, evidence suggests the involvement of key individuals, including Ravichandran and Arun Nehru, DMK MP and Nehru’s son, in orchestrating the diversion of funds.
Additional evidence unearthed by ED also indicated alleged corruption in the MAWS department.
The ED contended that the findings revealed pre-fixed commissions for awarding tenders, rigged procurement processes, and a well-organised nexus of officials, middlemen, and politically linked individuals.
The investigation has also uncovered a pattern of illegitimate funds being layered and siphoned through interconnected entities, suggesting the existence of a broader financial and administrative cartel operating across the state, ED had alleged.
Evidence of bribe collection for transfer/posting of officials of the MAWS department have also been found, ED said in its statement.
Further investigation is underway to trace the full scope of this web and to quantify the loss incurred to the public exchequer, the agency added.
ED said that it has also identified assets and properties acquired using the Proceeds of Crime (POC) and is in the process of quantifying and attaching them under the provisions of PMLA, 2002.
However, the release did not explicitly say wether the POC mentioned in the statement referred to the POC from the predicate offence case filed by the CBI or it included POC from the alleged corruption the agency has unearthed in MAWS department as well.
