Money laundering case: ED attaches ₹80-cr assets of TRS MP Nageshwar Rao, family

TRS parliamentarian Nama Nageshwar Rao and his family members' 28 immovable properties and other assets worth ₹80.65 crore were provisionally attached by the Enforcement Directorate in an ongoing money laundering case against Ranchi Expressway Ltd and Madhucon Projects Limited.

Nageshwar Rao is promoter and director of Madhucon group of companies and a personal guarantor to a bank loan defaulted by the company, said the ED. The agency has also attached the registered office of Madhucon groups and a residential property at Jubilee Hills, Hyderabad, belonging to Rao and his family members.

Of the total assets freezed, ED has attached immovable assets valued at ₹67.08 crore at Hyderabad, Khammam and Prakasham districts, and movable assets of ₹13.57 crore including shareholding of Rao and his family members in Madhucon Projects Ltd, Madhucon Granites Limited and in other sister companies, said the ED in a statement.

Now, the total value of the confiscated assets has gone up to ₹147.73 crore. In July too, the sleuths had provisionally attached 105 immovable properties and other assets worth of ₹73.74 crore belonging to Madhucon Group and its directors and promoters. Properties were also confiscated of Madhucon Projects Limited and group companies, Nama Nageshwar Rao and other promoter and director of company after conducting multiple searches. To strengthen its case, the ED had recorded multiple statements of promoters, sub-contractors, bankers, engineers and forensic auditors.

The agency has charged that the investigation has revealed that the Madhucon Group promoters siphoned off the loan funds of this project by taking the entire EPC contract from its SPV, and then by way of huge mobilisation and material advances. But instead of using those advances for the work, they diverted it for their other projects, said officials.

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

These sub-contractors did not work, had no sufficient expertise, and were based either in Andhra Pradesh or Telangana. The project, however, 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 pointed out. ED has identified direct diversion of ₹361.29 crore from the bank loan obtained by Ranchi Expressways Limited.

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