TDP MP Y Sujana Chowdary, ED Raids And Property Details

Hyderabad: 120 Shell companies involved in bank fraud and money laundering
* Raids in 8 places in Hyderabad & Delhi | 6 luxury cars including a Ferrari, Range Rover etc.
* hard disks & 126 fake rubber stamps seized
* Default of more than 5,700 crore bank loans
* Sujana Choudary called for questioning by ED on November 27...

The Enforcement Directorate (ED), conducted searches at eight places in Hyderabad and Delhi which belonged to TDP Rajya Sabha MP, Y Sujana Chowdary who is a close aide of Andhra Pradesh Chief Minister Chandrababu Naidu. The searches were conducted on Friday and Saturday under the Prevention of Money Laundering Act (PMLA), in pursuance of a bank fraud case of a firm, Ms Best and Crompton Engineering Projects Ltd (BCEPL).

Interestingly the move comes close on the heels of a series of raids by the Income Tax authorities against TDP leaders and another close aide of Chandrababu Naidu and TDP MP C.M. Ramesh last month and also just after the Andhra Pradesh government withdrew permission to the CBI to operate within its territory.

Also Read: Irregularities To The Tune Of 100 Crores In TDP MP CM Ramesh Companies

The ED officials first raided the offices of Ms Best and Crompton Engineering Projects Ltd (BCEPL) an electrical equipment manufacturer, after a complaint was filed by three banks who claimed they were cheated by BCEPL which had borrowed a loan of Rs 364 Crore by submitting false statement of accounts. BCEPL is registered in Nungambakkam, Chennai and the Directors are Ravi Narayanasamy Balachandran, Kakulamarri Srinivas Kalyan Rao, Meka Ramakrishna Varma, Lakshman Rao Srimantula, Nerendra Reddy Yeddula.

After that, the Chennai ED officials searched the BCEPL office located in the premises of the Sujana Group of Companies which is in Nagarjuna Circle in Punjagutta, Hyderabad.

Also Read: Ferrari, Ranger Rover And Benz Among Luxury Cars Seized In ED Raid On Sujana Chowdary Residence

Clear case of money laundering

Documents showed that BCEPL had taken loans from three banks to a tune of Rs 364 Crore and defaulted payments. The Banks had filed a complaint with the Central Bureau of Investigation (CBI) and the CBI filed three cases in this matter. The CBI had in turn informed the Enforcement Directorate that this would fall under the purview of the Foreign Exchange Management Act (FEMA) and the Chennai ED officials landed in Hyderabad and started searches, which exposed Sujana Chowdary's group of companies financial irregularities.

120 Shell Companies under the same roof

As the ED dug deeper , documents related to 120 shell firms, working under the umbrella of the Sujana group, were recovered after raids were carried out against the BCEPL. Verification conducted with the documents/records seized indicated that BCEPL along with other companies of Sujana group were functioning under the chairmanship of Y S Chowdary, who is a sitting RS MP of TDP. Evidence revealed that all the 120 companies were registered under the same address in Punjagutta , located in the premises of the Sujana Group of Companies.

Documents recovered indicate that most of the 120 companies were non-operating or existed on paper only without any genuine business activity, the agency said.

Dummy Directors operating under Sujana's Instructions

Further investigations revealed that the dummy directors of these shell companies acted under the instructions of Sujana Chowdary . This was evidenced through the email correspondences and communications recovered from the business/residential premises of the directors of BCEPL .

It said that in "voluntary statements tendered under Section 50 of the PMLA, directors of BCEPL had stated that Sujana Chowdary was the person responsible for the entire activities of Sujana group of companies and that they all have acted/rendered their signatures at his insistence either directly or through CFO and Company Secretary of Sujana group and that they were just namesake directors. They also declared that they had no idea as to how the funds were procured and how were utilised and that the entire BCEPL operations/transactions of Sujana Group of companies are known only to these key persons. Further searches in the eight locations of the Sujana group revealed that they had taken bank loans to a tune of 5,700 crore rupees and the banks had been defrauded by the group companies.

Statements made by these directors also indicated that indicate that certain loans to group companies were sanctioned against the personal guarantee of Sujana Chowdary himself. Hard disks pertaining to the email correspondence and other documents pertaining to this information were seized by the ED.

Other documents seized

Documents recovered revealed that various FEMA/DRI/CBI cases were existing against the group companies. And documents related to forex transactions were also seized by the ED. As part of the seizure, six luxury cars including a Ferrari, Range Rover , Mercedes Benz were seized which were registered under different director names but were used by Sujana Chowdary and his family members.

Earlier Cases of Criminal Conspiracy filed in 2017

In February 2017, the CBI had already registered a case against Best and Crompton Engineering Projects Limited for allegedly cheating Andhra Bank to the tune of Rs 71 crore. In its FIR against the Chennai-based company and its five directors including Managing Director Kakulamarri Srinivas Kalyan Rao, CBI has slapped charges under IPC sections pertaining to criminal conspiracy, cheating and forgery among others.

But later, Central Bank of India which was the leader of the consortium funding the company decided to enhance these limits from Rs 310 crore to Rs 900 crore, the complaint alleged.

Anticipating increased credit from the consortium of banks comprising Central Bank of India, Corporation Bank and Andhra Bank, the company undertook new projects but could not complete them on time, it claimed.

During investigations, banks found that the company indulged in fictitious book sales and was maintaining 24 accounts with all the banks and indulging in high value transactions on which consortium had no control, and indulged in diversion of funds, it alleged.

The ED searches seem to be spill over of this criminal case and there is also a possibility of questioning the bank officials who were involved in granting these loans.

Sujana group Statements

Meanwhile the Sujana Group of Companies in reaction to ED searches, has issued a statement, stating that ,"We have shared all information as sought by them. The businesses are being run lawfully and we condemn certain reports that lookout notices have been issued against some directors."

But the ED has clearly stated that Sujana Chowdary, a sitting Rajya Sabha member of the Telugu Desam Party (TDP), was the man behind the Sujana Group of companies and it has gathered evidence that "all directors of various Sujana Group of companies act under his instructions" and they have sent summons to the TDP MP to come to Chennai on November 27 for questioning related to these financial irregularities. This has sent shock waves among the senior TDP leaders, including Chief Minister Chandrababu Naidu himself, and they are all now in the process of seeking legal recourse to protect themselves as a precaution.