ED attaches TRS MP Nageswara Rao, family & Madhucon Group’s assets worth Rs.80.65 crore

ED has found that the Madhucon Group promoters siphoned off the loan funds of this project

October 17, 2022

ED attaches 28 immovable properties, other assets belonging to TRS MP Nama Nageshwar Rao & family members

The Enforcement Directorate (ED) has provisionally attached 28 immovable properties and assets worth Rs.80.65 crore of Telangana Rashtra Samithi (TRS) leader and Khammam Lok Sabha MP Nama Nageswara Rao and his family members.

The ED action is in connection with an ongoing investigation against M/s Ranchi Expressway Ltd, Madhucon Projects Limited, and its director and promoters in a money laundering case, a press release said.

The ED has found that the Madhucon Group promoters siphoned off the loan funds of this project by taking the entire contract from its SPV (Special Purpose Vehicle) and then taking huge mobilization and material advances, but instead of using those advances for the work, used it in their other projects, the agency said in a statement.

According to the statement, Rao is the promoter and director of the Madhucon Group of companies and a personal guarantor to the bank loan default by the company. The registered office of Madhucon Group of companies and residential property at Jubilee Hills in Hyderabad is among the properties seized by the ED.

These include immovable assets of Rs.67.08 crore in Hyderabad, Khammam, and Prakasham districts and movable assets of Rs.13.57 crore, including shareholding of Rao and his family members in M/s Madhucon Projects Ltd, M/s Madhucon Granites Limited and in other Madhucon Group of companies.

Also, the agency said, direct cash of amount Rs.75.50 crore was generated by paying money and then receiving back the amount through 6 shell entities (Usha Projects, Shree BR Visions, Sri Dharma Sastha Constructions, Sree Nagendra Constructions, Ragini Infrastructure, and, Varalakshmi Constructions) which were completely under the control of Nageshwara Rao and Nama Seethaiah.

“These sub-contractors did no work, had no sufficient expertise, were based in AP and 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 the equipment and labour of Madhucon Group…so the funds came back to the Madhucon Group,” the ED said.

In July this year, the ED provisionally attached 105 immovable properties and other assets worth of Rs.73.74 crore belonging to Madhucon Group and its directors and promoters. The attachments came after multiple raids and recording statements of promoters, sub-contractors, bankers, engineers, and forensic auditors.

[With Inputs from IANS]

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