HYDERABAD: In a significant development, the Directorate of Enforcement (ED) has provisionally attached 28 immovable properties and other assets worth Rs 80.65 crore belonging to Khammam MP Nama Nageswara Rao and his family members, in an ongoing money laundering case against Ranchi Expressway Ltd, Madhucon Projects Limited, its director and promoters under the provisions of the Prevention of Money Laundering Act 2022. On Monday, the ED stated in a press release that the TRS MP is a promoter and director of Madhucon Group of companies and a personal guarantor for the bank loan defaulted by the company.
Promoters siphoned off loan funds: ED
The ED also attached the registered office of Madhucon Group and a residential property at Jubilee Hills in Hyderabad. The investigation agency identified and attached immovable assets at Hyderabad, Khammam and Prakasam districts worth Rs 67.08 crore. Moveable assets worth Rs 13.57 crore including shares held by Nama Nageswara Rao and his family members in M/s Madhucon Projects Ltd, M/s Madhucon Granites Limited, and in other Madhucon group of companies were also attached. The total worth of assets attached is Rs 80.65 crore.
In July 2022, the ED had also provisionally attached 105 immovable properties and other assets worth Rs 73.74 crore belonging to Madhucon Group, its directors and promoters, which included the properties of Madhucon Projects Limited (MPL) and group companies after conducting multiple searches and recording statements of promoters, sub-contractors, bankers, engineers and forensic auditors.
The ED investigation revealed that the Madhucon Group promoters siphoned off the loan funds of this project by taking the entire EPC contract from its SPV, and then taking huge mobilisation and material advances. But instead of using these advance funds for the work, they used it in their other projects. The agency also found that direct cash of amount Rs 75.50 crore was generated by paying money and then receiving back the amount through six shell entities of 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 which were completely under the control of their chairman Nama Nageswara Rao and Nama Seethaiah.
The ED alleged that these sub-contractors did no work, had no sufficient expertise, and were based in AP and Telangana, whereas the project was in north India, and they took large advances from MPL and then paid back huge amounts to Madhucon Group on the pretext of using the equipments and labour of Madhucon Group. The ED has identified that the funds came back to the Madhucon Group and found direct diversion of Rs 361.29 crore from the bank loan obtained by Ranchi Expressway Limited.