ED attaches Rs. 71.61 Cr worth property of Nerella Rao, 10 others in Rs. 311.05 Cr loan fraud case

Visakhapatnam: Directorate of Enforcement (ED), Hyderabad Zonal Office has provisionally attached movable and immovable assets of Nerella Venkata Rama Mohan Rao and 10 others under the Prevention of Money Laundering Act (PMLA).

The properties have a book value of Rs 19.11 crore and a market value of Rs. 71.61 crore

The action was taken in a case related to cheating IDBI bank, Rajahmundry Branch to the tune of Rs. 311.05 crore.

The case relates to fraudulent Kisan Credit Card (KCC) Fish Tank loans in the name of 350 borrowers.

The attached properties are in the name of aggregators, their family members, and benamis and include immovable properties in the form of agricultural lands, commercial sites, and plots in Andhra Pradesh and Telangana having a market value of Rs. 71.61 Crore, besides bank account with a balance of Rs. 15.55 lakh.

ED initiated an investigation based on an FIR registered by CBI, Visakhapatnam under various sections of IPC and Prevention of Corruption Act, 1988 against Nerella Venkata Rama Mohan Rao and 10 others.

ED investigation revealed that Nerella Venkata Rama Mohan Rao, Badigantla Srinivasa Rao, Bandi Narayana Rao, Gidugu Satya Nagendra Srinivasa Rao, Karri Gandhi, Dr. Manepalli Surya Manikyam, Manepalli Suryanarayana Gupta, R V Chandramouli Prasad, Goluguri Rama Krishna Reddy, Vanapalli Narayana Rao, and Vanapalli Pallaiah acted as ‘aggregators’ for KCC Fish Tank loans sanctioned to 350 borrowers and were the ultimate beneficiaries.

These 11 aggregators conspired with the officials of IDBI bank & others and availed KCC Fish Tank loans totaling Rs. 311.05 Crore on the strength of fabricated documents, primarily in the names of their employees, relatives, benamis and farmers who were ineligible for such loans, ED said.

Further, the value of collateral securities offered against the loans was highly inflated in connivance with the valuers. The sanctioned KCC loan amounts were diverted from the borrowers' accounts to the aggregators through cash withdrawals as well as bank transfers.

The diverted and siphoned-off loans were utilized by the aggregators for the acquisition of immovable properties in their name and their family members'/benamis’ names. The diverted loan funds were also used by them for investment in their other business and repayment of old loans. The investigation also revealed that properties acquired by the aggregators out of the proceeds of crime were again used by them as collateral securities for availing further loans.

Further investigation is under progress, ED said.