SBI bank fraud case: ED raided 8 properties of Chadalavada Infra in Hyderabad, Ongole
The ED investigation revealed that CIL was enjoying credit facilities by availing fund-based and non-fund-based credit facilities from SBI
By Newsmeter Network Published on 5 Jun 2024 12:43 PM GMT
Hyderabad: The Directorate of Enforcement (ED), Hyderabad, conducted search operations on June 3 at eight locations in Hyderabad and Ongole (Andhra Pradesh) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 against Chadalavada Infratech Limited (CIL) and others involved in a case of bank fraud.
Case details
The ED initiated an investigation based on an FIR registered by CBI, ACB, Hyderabad against Chadalavada Infratech Ltd, its director Chadalavada Ravindra Babu and others, on a complaint of loan fraud by the State Bank of India (SBI), Hyderabad, for siphoning and diversion of funds, cheating and criminal conspiracy resulting in loss of public money of Rs 166.93 crores.
CIL, which was engaged in the execution of power infrastructure projects as an Engineering, Procurement and Construction (EPC) contractor, diverted a major part of the loan amount for a purpose other than for which it was sanctioned.
The ED investigation revealed that CIL was enjoying credit facilities by availing fund-based and non-fund-based credit facilities from SBI and that its directors conspired with others and misused the loan funds and diverted the same by employing various modus operandi like an accommodated letter of credit transactions, round-tripping of funds in the form of equity investment, diversion of loan amounts into the accounts of employees/directors and their family members etc.
The investigation revealed that a major portion of the letters of credit were issued to entities opened in the names of relatives and employees without any underlying business. Therefore, huge amounts of funds were diverted. Out of diverted funds, properties were acquired in the name of third parties, directors and family members.
Search operations led to the recovery and seizure of documents related to properties which are suspected to have been acquired out of proceeds of crime. Further, incriminating documents and digital devices were also seized.
Further investigation is under progress.
