HYDERABAD: The Hyderabad unit of the Enforcement Directorate (ED) has filed a Prosecution Complaint before the Special Court (PMLA), Hyderabad against Ranchi Expressway Ltd (REL), Madhucon Projects Ltd, Madhucon Toll Highway Ltd, Madhucon Infra Ltd and others under the provisions of Prevention of Money Laundering Act (PMLA), 2002.
The court took cognisance of the PC on August 31, 2024. The ED initiated investigation on the basis of an FIR registered by CBI ACB, Ranchi, against REL and its directors. Subsequently, the CBI filed a chargesheet before the Special Judge for CBI cases, Ranchi against REL and others. As per the FIR and chargesheet, NHAI had awarded NH-33 four-laning project on the Ranchi-Rargaon-Jamshedpur section to Madhucon Project Limited.
The group incorporated a Special Purpose Vehicle (SPV) with REL to execute the project. Madhucon Project Limited was the Engineering Procurement Construction (EPC) contractor of the project. However, Madhucon Group could not complete the project despite availing the full loan amount, and subsequently, the contract was terminated and an FIR was registered based on the directions of the Jharkhand High Court.
The ED investigation revealed that REL obtained loans worth `1,030 crore from a consortium of banks led by Canara Bank. However, the group did not utilise the entire loan amount for the stated purpose and diverted it to its associated entities and also siphoned off the loan by giving bogus works to its related shell entities.
The work on the ground suffered and could not be completed despite the entire loan amount being drawn. Eventually, Madhucon Group could not repay the loans and the loan account turned into an NPA. ED investigation also revealed that loan funds were diverted to sub-contractors and shell entities controlled by the group. However, these sub-contractors did no work, had no sufficient expertise and were based in Andhra and Telangana, whereas the project was in Jharkhand.
The ED identified diversion of Rs 365.78 crore during its investigation.