ED attaches assets worth Rs 80.65 cr of Khammam MP Nama Nageswara Rao

HYDERABAD: Enforcement Directorate (ED) has provisionally attached 28 immovable properties and other assets worth Rs 80.65 crore belonging to TRS leader in the Lok Sabha Nama Nageswara Rao (MP from Khammam) and his family members in an ongoing money laundering case against Ranchi Expressway Ltd, Madhucon Projects Limited and its director and promoters under provisions of Prevention of Money Laundering Act 2022.

Nama Nageswara Rao is promoter and director of Madhucon Group of companies and a personal guarantor to the bank loan defaulted by the company. The ED also attached the registered office of Madhucon Group of companies and their residential property at Jubilee Hills, Hyderabad.

The ED identified and attached immovable assets of Rs. 67.08 crore in Hyderabad, Khammam and in Prakasam District and movable assets of Rs. 13.57 crore including shareholding of Nama Nageswara Rao and his family members in Madhucon Projects Ltd, Madhucon Granites Limited and in other Madhucon Group of companies, amounting to Rs 80.65 crore.

Earlier in July 2022, the ED had also provisionally attached 105 immovable properties and other assets worth Rs 73.74 crore belonging to Madhucon Group of companies and its directors and promoters, which included the properties of Madhucon Projects Limited and Group companies after conducting multiple searches and recording multiple statements of promoters, sub-contractors, bankers, engineers, forensic auditors etc.

The ED investigation revealed that the Madhucon Group promoters syphoned 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 their other projects.

Also, direct cash of Rs 75.50 crores was generated by paying money and then receiving back the amount through six shell entities which were completely under the control of their Chairman Nama Nageswara Rao and Nama Seethaiah.

These sub-contractors did no work, had no sufficient expertise, were based in Andhra Pradesh and Telangana, whereas the project was in North India, and they took large advances from Madhucon Project Ltd, 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, bringing the funds back into the Madhucon Group.

ED has identified direct diversion of Rs 361.29 crore from the bank loan obtained by Ranchi Expressways Limited. Further investigation is going on.