Hyderabad, India – The Enforcement Directorate (ED), Hyderabad, carried out search operations on 03.06.2024 at eight locations in Hyderabad and Ongole (Andhra Pradesh) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The operations were directed against M/s Chadalavada Infratech Limited (CIL) and other individuals implicated in a case of bank fraud.
The ED commenced its inquiry subsequent to an FIR lodged by the CBI, ACB, Hyderabad, against M/s Chadalavada Infratech Ltd., along with its Director Chadalavada Ravindra Babu and other associates. This followed a complaint filed by the State Bank of India, Hyderabad, regarding allegations of loan fraud. The fraud involved siphoning and diversion of funds, cheating, and criminal conspiracy, resulting in a loss of public money amounting to Rs. 166.93 Crore.
CIL, operating as an Engineering, Procurement, and Construction (EPC) contractor for power infrastructure projects, diverted a significant portion of the loan amount for unauthorized purposes. The investigation uncovered instances where directors and accomplices misused loan funds through various means, including accommodated letter of credit transactions and round-tripping of funds.
Further investigation revealed that a major portion of the letters of credit was issued to entities without any underlying business, leading to the diversion of substantial funds. Properties were acquired in the name of third parties, directors, and their family members using the diverted funds.
The search operations resulted in the recovery and seizure of documents related to properties suspected to have been acquired from the proceeds of crime. Additionally, incriminating documents and digital devices were confiscated, aiding in furthering the investigation into the complex web of financial misconduct and money laundering.
