Bank Fraud Case: ED's big action, 96 crore property of road construction company attached

Pankaj Prasad
Bank Fraud Case
Bank Fraud Case

The money laundering case came to light after the CBI FIR lodged in March 2019 against Ranchi Expressway Limited (a Madhucon group company) and its directors.

The Enforcement Directorate has attached assets worth over Rs 96 crore of a Hyderabad-based road construction company under the Anti-Money Laundering Act in a case related to bank loan fraud .

Major ED action on 105 locations of the company in Hyderabad, West Bengal and Andhra Pradesh

In a provisional order under the provisions of the Prevention of Money Laundering Act (PMLA), 105 land properties located in Telangana (Hyderabad), West Bengal and Andhra Pradesh (Visakhapatnam, Prakasam and Krishna districts) and the promoters' share of the company Madhucon Projects Ltd. total assets worth Rs 96.21 crore including movable assets of amounted to Rs 7.36 crore were seized.

The matter is related to the construction of four-lane Ranchi-Rargaon-Jameshdpur section of NH-33

The money laundering case came to light after the CBI FIR lodged in March 2019 against Ranchi Expressway Limited (a Madhucon group company) and its directors. The matter began when the National Highways Authority of India (NHAI) designed, built, financed, operated and commissioned a four-lane stretch from km 114 to km 277.50 (approximately 163.50 km) on the Ranchi-Rargaon-Jameshdpur section of NH-33. The project was handed over to Madhucon Project Limited on 18 March 2011 on the basis of Transfer (DBFOT) pattern.

Court had ordered fraud investigation against the company

A company named Ranchi Expressway Limited (REL) was formed by Madhucon Group to execute this project, the ED said in a statement. Kamma Srinivasa Rao, S Nama Setaiah and Nama Prithvi Teja were the founding directors of the said company and Madhucon Project Limited was the contractor for Engineering Procurement Construction (EPC) of the project. The ED has alleged that the Madhucon group could not complete the project despite availing the full loan amount and later their contract was terminated and a trial was initiated against the company based on the directions of the High Court. The court ordered this trial on the basis of the report of Serious Fraud Investigation Office (SFIO) and NHAI.

such fraud

According to the agency, the investigation found that the directors and promoters of Ranchi Expressway Limited had obtained loans of about Rs 1,030 crore from a consortium (consortium) of banks led by Canara Bank. Madhucon Group did not utilize the entire loan amount for fulfillment of its stated objectives and diverted the same to its affiliated entities for other purposes.