Telangana: ED raids TRS MP Nama Nageswara Rao in Rs 1,064 crore bank fraud case

HYDERABAD: The Enforcement Directorate (ED) on Friday conducted searches on the residences and offices of TRS MP Nama Nageswara Rao, his Madhucon Group of companies and Ranchi Expressway Limited directors in connection with Rs 1,064 crore bank fraud case. Nageswara Rao is the floor leader of TRS in the Lok Sabha.
Searches began at 7 am at six locations, including Madhucon Infra office in Jubilee Hills and residences of Nageswara Rao, CMD of Ranchi Expressway K Srinivasa Rao and directors N Seethaiah and N Prithvi Teja, who is the son of Nageswara Rao.The ED is probing the case for money laundering under the Prevention of Money Laundering Act.
The MP is a personal guarantor for the loans taken from various banks.
The CBI first issued an FIR in 2019 and filed a chargesheet in 2020 against Ranchi Expressway and its directors. In the FIR, the CBI named Madhucon Projects Ltd, Madhucon Infra, Madhucon Toll Highways Ltd, auditors Kota and Company and unidentified officials of a consortium of 15 banks.
Madhucon was given a contract to execute a road project pertaining to four-laning of 163 kilometre stretch on NH-33 connecting Ranchi with Jamshedpur. The project was awarded by the National Highways Authority of India (NHAI) to Madhucon Projects Ltd in March 2011.
Madhucon later floated a special purpose vehicle, Ranchi Expressway Ltd, for the project on design-buildfinance-operate and transfer model.
The banks, led by Canara Bank, agreed to fund Rs 1,151 crore to Madhucon Group with a contribution of Rs 503 crore from promoters to execute the project.
The Serious Fraud Investigation Office (SFIO), in its preliminary report, however, alleged that the promoters round-tripped Rs 50 crore, claimed Rs 98 crore towards maintenance, used Rs 94 crore of mobilisation advance and diverted Rs 22 crore and thus misappropriated Rs 264 crore.
The CBI alleged that there was no progress in the project work and the loan became a non-performing asset in 2018. In January 2019, the NHAI terminated its agreement with Madhucon Projects and forfeited Rs 73 crore.