KMC company owned by Mekapati family booked for cheating NHAI

Hyderabad: The sleuths of the Enforcement Directorate (ED) have booked Hyderabad-based Krishna Mohan Construction (KMC) Limited for embezzlement of funds belonging to the National Highways Authority of India (NHAI).

KMC is owned by the late YSRCP minister Gautham Reddy’s family. The company’s directors are Pruthvi Kumar Reddy Mekapati, Shujaat Ghousuddin Khan, Mekapati Sri Kirti and Amudala Sreeramulu Nageswar Rao.

The ED on October 16 raided the offices of Bharat Road Network Limited (BRNL) and Guruvayoor Infrastructure Private Limited (GIPL) in Kolkata, KMC Constructions Ltd in Hyderabad and GIPL office in Thrissur in the case of embezzlement of funds of NHAI.

The ED was acting on the FIR registered by the Central Bureau of Investigation (CBI) under various sections of IPC, 1860 and the Prevention of Corruption Act, 1988 against Guruvayoor Infrastructure Pvt Ltd (GIPL) and others.

It is alleged that the company and its then director Vikram Reddy entered into a criminal conspiracy with unknown officials of NHAI, Palakkad, in connection with the execution of work related to two sections of National Highway 47, from 2006 to 2016 and thereby cheated NHAI, the government of India, to the tune of about Rs 102.44 crores.

The investigation revealed that GIPL and sub-contractor KMC Constructions Limited, along with the officials of NHAI and the project’s independent engineer fraudulently obtained the completion certificate of the road project and started collecting tolls from the public.

The investigation has revealed that without completing the construction of the bus bays, the accused company illegally generated revenue from leasing out the advertisement space. Thereby, the accused derived undue benefit of Rs 125.21 crores which is the value of the work not executed and proceeds of crime under PMLA, 2002.

Incriminating documents found

It was found that GIPL invested the toll collections into mutual funds without remitting the cost of work to NHAI. Hence, a freezing order was issued under Section 17(1-A) of PMLA, 2002, for a value of Rs 125.21 crores against the bank balance and fixed deposits of Guruvayoor Infrastructure Private Limited in Kolkata.

Further, searches have led to the seizure of incriminating documents from the office of KMC Constructions Limited which revealed that the company has sold its 51 per cent of share in GIPL to BRNL without any proper valuation and without taking necessary approval from NHAI as per the contract terms.

Hence a freezing Order was issued under Sections 17(1-A) of PMLA, 2002 against the bank balances of KMC Constructions Limited for a value of Rs 1.37 crores.