The Enforcement Directorate (ED) has provisionally attached assets worth Rs 80.65 crore belonging to Telangana Rashtra Samithi (TRS) MP Nama Nageswara Rao, the founder of infrastructure company Madhucon Projects Limited, in a money laundering case. A total of 28 immovable properties and other assets belonging to the TRS party floor leader in Lok Sabha and and his family members were attached in an ongoing money laundering case against M/s Ranchi Expressway Ltd, Madhucon Projects Limited and its director and promoters under the Prevention of Money Laundering Act, 2002. Nama Nageswara Rao is the promoter and director of Madhucon group of companies and a personal guarantor to the bank loan defaulted by the company, the ED said. The agency has also attached the registered office of Madhucon group of companies and a residential property in Jubilee Hills, Hyderabad.
Nama Nageswara Rao represents the Khammam Lok Sabha constituency. He is one of the wealthiest politicians in the country. In a press statement, the ED said it has identified and attached immovable assets worth Rs 67.08 crore in Hyderabad and Khammam in Telangana, and Prakasam district in Andhra Pradesh. Movable assets of Rs 13.57 crore including shareholding of Nama Nageswara Rao and his family members in Madhucon Projects Ltd, Madhucon Granites Ltd and other Madhucon companies have also been attached, totalling to Rs 80.65 crore.
Earlier in July, 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 after conducting multiple searches and recording statements of promoters, sub-contractors, bankers, engineers, forensic auditors and others, it said. According to the statement, ED investigation revealed that the Madhucon Group promoters siphoned off the loan funds of a project by taking the entire Engineering, Procurement and Construction Contract (EPC Contract) from its special purpose vehicle (SPV). They then allegedly took huge mobilisation and material advances, and used it in their other projects.
Moreover, direct cash of Rs 75.50 crore was generated by paying money and then receiving back the amount through six shell entities which were completely under the control of Nama Nageswara Rao and Nama Seethaiah, the statement said. It added that the sub-contractors did no work, had insufficient expertise, and were based in Andhra Pradesh or Telangana, while the project was in north India. The sub-contractors took large advances from Madhucon Projects Limited from the loan funds and then paid back huge amounts to Madhucon Group on the pretext of using its equipment and labour, the ED statement said. It also said that direct diversion of Rs 361.29 crore has been identified from the bank loan obtained by Ranchi Expressways Limited. Further investigation is going on, it added.