india

Updated: Nov 24, 2018 23:34 IST

Officials of the Enforcement Directorate conducted searches at the residence and offices of former Union minister and Telugu Desam Party legislator YS Chowdary in Hyderabad and Delhi on Friday and Saturday to probe into allegations of money laundering and other financial irregularities to the tune of Rs 5,700 crore.

The agency, which investigates financial crimes, said in a release that the searches were conducted at eight locations, seven in Hyderabad and one in Delhi, belonging to the Sujana Group owned by the legislator. The searches have revealed that the group companies had defrauded banks to the tune of more than Rs 5,700 crore.

It said documents recovered in another premise revealed that various cases were pending against the group under Foreign Exchange Management Act, Directorate of Revenue Intelligence and Central Bureau of Investigation. The cases were existing against the group companies.

The agency had also seized documents related to forex transactions, which indicated that the group was controlling over 120 companies and most of them were non-operating or companies on paper only without any genuine business activities.

“Preliminary statements indicate that certain loans to group companies were sanctioned against the personal guarantee of Chowdary. At his residential premises, six high-end cars, including those of Ferrari, Range Rover, Mercedes Benz, were found which were registered in the name of dummy companies. These vehicles have been seized under the provisions of PMLA,” the release said.

Authorities summoned Chowdary to appear before them on November 27 for further investigation.

The directorate pointed out CBI had registered three cases based on complaints from three banks stating that one company, Chennai-based Best & Crompton Engineering Projects Ltd, had obtained loans from them by falsifying accounts and submitting false statements, causing them a cumulative loss of Rs 364 crore. It included a loss of Rs 133 crore to Central Bank of India, Rs 71 crore to Andhra Bank and Rs 159 crore to Corporation Bank.

Based on these FIRs, investigations under the Prevention of Money Laundering Act (PMLA) were initiated by the Directorate of Enforcement, Chennai. As part of investigations, searches were conducted on October 8 at the residential and office premises of the key officials of BCEPL in Chennai, Bengaluru and Hyderabad.

During the search proceedings, certain incriminating documents and records were recovered and seized for further investigation. Searches also resulted in the recovery and seizure of 126 rubber stamps of various shell companies from the business premises at Plot No18, Nagarjuna Hills in Hyderabad, which belongs to Sujana Group.

“Investigations revealed that all the directors of these companies belonged to various Sujana Group companies, which was evident from the email correspondences and communications recovered from the business/residential premises of these companies, the ED release said.

“All of them had admitted in their voluntary statements that they were just namesake directors and had no idea of the entire operations and transactions of Sujana Group,” it added.

A spokesperson of the Sujana Group condemned the “malicious campaign” against Chowdary and other associated companies. The group strongly objected to the attempts being made by some people to tarnish the image of the company by spreading false propaganda, he said.

“The ED authorities from Chennai came to the Sujana Group offices to collect some information with regard to the investigation into a 10-year-old case. The group officials provided all the relevant information sought by the ED authorities,” he said.

Chowdary, popularly known as Sujana Chowdary as he owns Sujana Group of companies, was a minister of state in the Narendra Modi cabinet holding science and technology portfolio till March last when the TDP pulled out of the National Democratic Alliance demanding the special category status to Andhra Pradesh.