ED raids premises of Chadalavada Infratech in Hyderabad, Ongole

Hyderabad: Officials of the Enforcement Directorate (ED) on Thursday conducted searches at eight locations related to Chadalavada Infratech Limited (CIL) in Hyderabad and Ongole in relation to a bank fraud case under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.

The action followed an FIR registered by CBI, ACB, Hyderabad against CIL, its Director Chadalavada Ravindra Babu and others, on a complaint by State Bank of India, Hyderabad, for siphoning funds, cheating and criminal conspiracy resulting in loss of public money to the extent of Rs166.93 crore.

CIL, engaged in execution of power infrastructure projects as an engineering, procurement and construction (EPC) contractor, diverted a major part of loan for the purpose other than for which it was sanctioned.

ED investigation revealed that CIL was enjoying fund-based and non-fund-based credit facilities from SBI and its directors conspired with others and misutilised the funds in the form of equity investment, diversion of loan amounts into the accounts of employees/Directors and their family members.

The ED Investigation revealed that a major portion of the letters of credit was issued to entities opened in the names of relatives and employees without any underlying business. 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 the proceeds of the crime.

On October 1, 2020, the CBI registered cases against CIL and its Managing Director for allegedly cheating SBI to the tune of `167 crore. The company is involved in setting up of electricity infrastructure such as transmission, distribution and construction of substations. It was a contractor in projects in Assam, Bihar, Chhattisgarh, Karnataka and Maharashtra.