ED attaches Rs 2.91 crore assets in Rs 12.30 crore Syndicate Bank loan fraud case

Hyderabad: The Directorate of Enforcement (ED), Hyderabad Zonal Office, has provisionally attached four immovable properties worth Rs 2.91 crore under the Prevention of Money Laundering Act (PMLA), 2002, in connection with a major bank fraud case involving Subbaiah Korrapati.

The attached assets include agricultural land, residential plots and a commercial property held in the names of his associates.

The ED initiated its probe based on an FIR registered on November 10, 2020, by the Anti-Corruption Bureau (ACB), Hyderabad. The case pertains to alleged cheating and forgery under various sections of the Indian Penal Code, 1860, involving fraudulent loan availment from Syndicate Bank, Chandanagar Branch.

According to the FIR, Subbaiah Korrapati fraudulently obtained credit facilities amounting to Rs 10 crore by submitting forged sub-contract agreements and non-existent work orders.

Subsequently, the ACB filed Chargesheet No. 03/2023 on April 21, 2023, before the XXI ACMM-cum-Special JMFC for CBI cases, Hyderabad.

The chargesheet revealed that Korrapati, in connivance with others, deliberately submitted forged property documents as collateral to secure loans totaling Rs 12.30 crore.

He later defaulted on repayments, allegedly causing a wrongful loss of Rs 12.30 crore to the bank and a corresponding wrongful gain to himself.

ED’s investigation found that the loans were sanctioned against non-existent and non-converted properties that were registered at highly inflated values.

Instead of using the funds for the stated business purposes, Korrapati allegedly diverted and siphoned off the proceeds through bogus sub-contracts, fake raw material bills, round-tripping of funds and cash withdrawals.

The probe further revealed misuse of bank guarantees under the NSIC Raw Material Assistance Scheme. Korrapati is accused of submitting forged pro-forma invoices and routing the funds back into his own bank accounts.

According to the ED, the proceeds of crime were used for repayment of other loans, securing new projects, and meeting personal as well as business expenditures.

The Enforcement Directorate stated that further investigation in the case is in progress.