Khammam MP Nama Nageswara Rao and members of his family are under the ED scanner in a money-laundering case.
Published Oct 17, 2022 | 9:20 PM ⚊ Updated Oct 18, 2022 | 12:07 AM
Khammam MP Nama Nageswara Rao. (Supplied)
In a development that may have political ramifications, the Enforcement Directorate (ED) has provisionally attached 28 immovable properties and other assets — worth ₹80.65 crore — belonging to TRS Lok Sabha member Nama Nageswara Rao and his family members.
The action is said to have been taken as part of an ongoing money-laundering case against M/s Ranchi Expressway Ltd-Madhucon Projects Limited SPV and its director and promoters under provisions of the Prevention of Money Laundering Act (PMLA) of 2002.
The ED said in a statement that Nageswara Rao was the promoter and director of the Madhucon Group of companies and a personal guarantor to the bank loan that the company defaulted on.
The directorate has also attached the registered office of the Madhucon Group and some residential property at Jubilee Hills in Hyderabad.
The ED has identified and attached immovable assets of ₹67.08 crore in Hyderabad, Khammam, and the Prakasham district, and movable assets of ₹13.57 crore, including the shareholding of Nageswara Rao and his family members in M/s Madhucon Projects Ltd, M/s Madhucon Granites Limited, and in other Madhucon Group companies, totalling ₹80.65 crore.
In July, the ED had also provisionally attached 105 immovable properties and other assets worth ₹73.74 crore belonging to the Madhucon Group.
At that time, ED sleuths had conducted multiple searches and recorded multiple statements of promoters, sub-contractors, bankers, engineers, and forensic auditors.
The investigation has 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 those advances for the work, used it in other projects.
The ED believes direct cash of ₹75.50 crore was generated by paying money and then receiving back the amount through six shell entities — 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 Nageshwara Rao and Nama Seethaiah.
These sub-contractors did no work, had no sufficient expertise, and were based in Andhra Pradesh or Telangana, whereas the project was in North India, and they took large advances from MPL from the loan funds and then paid back huge amounts to Madhucon Group on the pretext of using its equipment and labour.
So, the funds came back to the Madhucon Group, the investigation is believed to have unveiled.
The ED has identified the diversion of ₹361.29 crore from the bank loan obtained by Ranchi Expressways Limited.
