A day after a team of investigators from the Central Bureau of Investigation (CBI) conducted multiple raids against TDP MLC Vakati Narayana Reddy, based on a complaint of fraud, Andhra Chief Minister Chandrababu Naidu suspended the businessman-politician.

"Our MLC has been accused of fraud and CBI is probing the case so we are suspending him from party with immediate effect. Based on the conclusion of the inquiry, we will take further decision," Naidu was quoted as saying.

The CBI raids came after a complaint was lodged by the Industrial Finance Corporation of India (IFCI) against a firm owned by Narayana Reddy.

Reddy's firm, located at Banjara Hills in Hyderabad, had reportedly applied for loans to execute projects worth Rs 190 crore in the financial year 2014-2015. 

The CBI alleged that the company submitted documents showing inflated values of certain immovable properties for security for the loan, with an intention of not repaying the money.

It added that the accused caused a loss of Rs 205.02 crore to IFCI Ltd.

Reddy is the Founder-Chairman of the VNR Group of organisations in Nellore, and defected from the Congress to the TDP in 2014.

The CBI has filed a case under various sections of the IPC and the Prevention of Corruption Act. The investigating agency has also sealed all of Reddy’s properties, including his residence at Nellore.

Watch CM Naidu’s statement here: