TRS MP's house, offices searched by Enforcement Directorate
Officials of the Enforcement Directorate (ED) on Friday searched the residence and offices of the TRS Khammam MP Nama Nageswara Rao and of the directors of Ranchi Expressway Ltd in connection with Rs 1,064-crore bank fraud
Hyderabad: Officials of the Enforcement Directorate (ED) on Friday searched the residence and offices of the TRS Khammam MP Nama Nageswara Rao and of the directors of Ranchi Expressway Ltd in connection with Rs 1,064-crore bank fraud. The searches began at 7am at six locations including Madhucon Infra office in Jubilee Hills, residences of the MP and of CMD of Ranchi Expressway K Srinivasa Rao, directors N Seetaiah and N Prithvi Teja, in Khammam.
The MP had taken loans from several banks leading to mounting arrears resulting in a huge scam. In 2019 the Central Bureau of Investigation (CBI) had also registered an FIR against him relating to the Ranchi Expressway Ltd as he was its director. The ED is probing the case for money laundering under the Prevention of Money Laundering Act. The FIR also named Madhucon Project, Madhucon Infra, Madhucon Tolly Highway, auditors and officials of a consortium of banks. Rao is said to be the personal guarantor for loans taken by Ranchi Expressway Ltd. His son Prithvi Teja was also one of the board members of the company.
The banks had agreed to fund Rs 1,152 crore, with a contribution of Rs 503 crores by the promoters. The Serious Fraud Investigation Office (SFIO) in a preliminary report said that the promoters had round-tipped Rs 50 crore, while claiming Rs 98 crore as maintenance.
Additionally, Rs 94 crore was used as mobilisation advance, while Rs 22 crore was diverted. Overall, Rs 264 crore was misappropriated. The CBI too had alleged that there was no progress in the project. Instead, the accused resorted to fraud to procure the loan, which turned into a non-performing asset in 2018. The NHAI had terminated its agreement with the company in January 2019.