Hyderabad ED attaches Rs 111.57 crore of Hackbridge Hewittic and Easun

Hyderabad: The Enforcement Directorate, Hyderabad, has attached Rs 111.57 crore of Hackbridge Hewittic and Easun Ltd. under PMLA, 2002, in the case concerning Victory Electricals.

The ED initiated an investigation on the basis of an FIR registered by CBI against Victory Electricals Ltd. (VEL), Victory Transformers and Switchgears Ltd. (VTSL), their directors, Mahindra Kumar Vaddineni, Manoj Kumar Vaddineni, Venkatappa Naidu Vaddineni and others.

What is the case about?

As per the said FIR and chargesheet, the accused criminally conspired to submit fabricated financial documents, inflated balance sheets and false receivables to the SBI to secure credit facilities; misled the bank to issue LC facilities and credit limits; and siphoned off funds through shell companies, resulting in loss of public money to the SBI to the tune of Rs 136.50 crore.

Investigation progress so far

Loan rerouted: The ED investigation revealed that the accused Mahindra Kumar Vaddineni, being in control of both companies VEL and VTSL, diverted and rerouted the loan amount to the tune of Rs 88.93 crore through a web of shell companies managed and operated at Delhi by co-accused Naveen Khatri.

Origin of funds hidden: These transactions were effected to create multiple layers in the money trail, with an intent to camouflage the origin of the funds and make the illicit money appear as legitimate business proceeds without any actual business transactions.

After layering, the diverted Proceeds of Crime (POC) were transferred back to the other bank accounts of VEL and VTSL, falsely projecting them as untainted business proceeds from the shell companies.

Rs 15.65 crore withdrawn in cash: The accused, instead of utilising the loan funds for stated business purpose, siphoned off the funds by setting aside the other liabilities of VEL and VTSL to the tune of Rs 17.17 crore; transfer to the other bank accounts of VEL and VTSL without any legitimate business to the tune of Rs. 46.31 crore and by making cash withdrawals from loan accounts of the accused companies to the tune of Rs 15.65 crore.

During the PMLA investigation, information obtained from SBI revealed that in 2011, SBI had issued a Foreign Bank Guarantee in respect of the supply of transformers in favour of the overseas customer on behalf of VEL for $50,00,000.

SBI could only recover Rs 77.47 crore

Due to non-execution of the work order, the SBI was compelled to honour the said bank guarantee and the same was paid to Bank of Baroda, Sharjah, Dubai in 2021 for Rs 45.10 crore.

The loss to SBI on account of the said Foreign Bank Guarantee is separate from the NPA amount. Hence, the PMLA investigation revealed that the total loss to SBI was Rs 189.04 crore (including interest). Out of the said amount, SBI could recover Rs 77.47 Crore, and the loss of Rs 111.57 crore remained to be recovered.

Revealing the directors

ED investigation revealed that unencumbered properties belonging to VEL and VTSL or the accused were not available for the purpose of attachment. Hence, further investigation was conducted to identify other properties.

Further, it was revealed that VEL holds a controlling 93.28 per cent stake in M Hackbridge Hewittic and Easun and that Mahindra Kumar Vaddideni, Manoj Kumar Vaddideni and Venkatappaiah Naidu Vaddineni are directors of the company.

Accordingly, land parcels worth Rs 111.57 crore belonging to Hackbridge Hewittic and Easun have been provisionally attached during the investigation.

Further investigation is in progress.