ED establishes connection between G Vivekanand and Vigilance Services in ₹8-crore transaction

The ED initiated the probe on the basis of three FIRs registered by the ACB relating to the criminal misappropriation of funds of the Hyderabad Cricket Association. 

Published Nov 22, 2023 | 10:48 PMUpdated Nov 22, 2023 | 10:49 PM

File photo of G Vivek at an election rally.

The Enforcement Directorate (ED) has found that Gaddam Vivek — also known as G Vivekanand and Vivek Venkataswamy, the Congress candidate from the Chennur seat in the upcoming Telangana Assembly elections — and his wife have “indirect” control over Vigilance and Security Services Pvt Limited, into whose bank account he recently transferred ₹8 crore.

In an official statement, the ED on Wednesday, 22 November, said that the bank account of Vigilance Security Services was being used “circuitously”  to transfer money with no real business rationale, but G Vivek, his wife, and their company Visaka Industries had transactions of more than ₹100 core with it.

The investigation was a follow-up on a reference from the Telangana police to probe a transaction of ₹8 crore from the bank account of G Vivek to Vigilance Security Services.

Also read: I-T sleuths conduct searches at Gaddam Vivek’s home, offices

The link

Vigilance Security Services declared a mere ₹20 lakh as revenue from operations in its latest balance sheet, whereas it reported assets worth ₹64 crore mainly in the nature of long-term loans and advances.

Since inception, credit and debit transactions in the company’s impugned bank account were found to be more than ₹200 crore.

The ED investigation, prima facie, further revealed Foreign Exchange Management Act (FEMA) interventions by Vigilance Security Services and its parent company Yeshwant Realtors — whose majority shares are held by a foreign national.

Prima facie, FEMA violations were also noticed in the incorporation of Vigilance Services by G Vivek in a foreign tax haven country.

The officials of ED in their searches on Tuesday, 21 November, at the residences of Vivek in Hyderabad as well as the offices of Visaka Industries in Hyderabad and Vigilance and Security Services Prvt Ltd at Ramagundam, and temporary places of residence at Hitech City and Mancherial, led to the seizure of incriminating documents and articles.

They included digital devices and documents indicating suspicious or unaccounted-for transactions worth several cores of rupees as well as the use of unaccounted cash in property deals.

Seized documents also revealed large-scale inter-corporate deposits with group companies having no legitimate business but holding huge land assets.

Searches also confirmed the bogus nature of Vigilance Security Services Pvt Ltd which was found to be non-existent at its declared addresses, said the ED.

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More ED searches

The ED also conducted searches under the provisions of the Prevention of Money Laundering Act (PMLA) of 2002, at nine locations in Telangana on Tuesday, 21 November.

These included Gaddam Vinod, Shivlal Yadav, and Arshad Ayub, who served as president, vice-president, and secretary, respectively, of the Hyderabad Cricket Association (HCA).

Offices premises of SS Consultants and the residential premises of its Managing  Director Satyanarayana were also searched.

The officials seized incriminating documents, digital devices, and unaccounted-for cash of ₹10.39 lakh during the searches.

Meanwhile, a search at one of the premises of Gaddam Vinod revealed that it was being used as an office for several companies owned or controlled by his brother Gaddam Vivekanand, a former MP.

Also read: Suspended Telangana Cong leaders approach ED against Revanth

Irregularities at HCA

The ED initiated the investigation on the basis of three FIRs registered by the Anti-Corruption Bureau (ACB) in Hyderabad relating to the criminal misappropriation of funds of the Hyderabad Cricket Association to the tune of ₹20 crore.

The corresponding chargesheets filed by the ACB contain allegations of serious irregularities in the procurement of DG sets, firefighting systems, and canopies for the Rajiv Gandhi Cricket Stadium constructed in Uppal in Hyderabad.

As per the chargesheets, several works were delayed inordinately, despite deadlines. This, they said, led to escalated costs, budget enhancements, and corresponding losses to the HCA.

It was also revealed that the office-bearers of the HCA — including its then secretary, president and vice-president — arbitrarily got various tenders and works allotted to preferred vendors or contractors at higher-than-market rates, and that they did so in collusion with private parties.

The chargesheets revealed that these happened without proper tender processes and in many cases even before the receipt of quotations. Advance payments were made to many contractors but no work was done by them, they added.

Searches at the said premises also led to the seizure of incriminating documents that revealed that Visaka Industries and its group companies had been regularly indulging in large-value cash transactions and cash payments related to their real estate activities.

Further, several instances of receipt of cash from various persons and passing of adjustment entries in such real-estate companies’ books for accommodating such transactions were noticed in the seized documents.

Further investigation was under progress, the official release said.

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