EOW arrests aspiring politician for multi-crore fraud

New Delhi, July 4 (IANS) The Economic Offences Wing (EOW) has arrested an aspiring politician for orchestrating a fraud worth over Rs 6 crore to finance his campaign for the 2014 Telangana Assembly polls, a Delhi Police official said.

The official said that Sidhartha Reddy, a resident of Begumpet in Hyderabad, was absconding after contesting the polls, following which a reward of Rs 50,000 was declared on information leading to his arrest.

A case was registered at the EOW police station in the national capital based on the complaint of the Director of CPB India Pvt. Ltd., which alleged that the company had secured a confirmed international order to export 50,000 metric tonnes of iron ore from India to China.

In this regard, the Director was looking for Indian sellers/traders who could supply the necessary quantity of iron ore.

Reddy had visited Delhi and persuaded the complainant by assuring them that he would supply the required amount of iron ore to fulfill the order.

“Subsequently, a buyer-seller contract was signed, valued at $6,000,000. The accused was obligated to provide a bank guarantee equivalent to $1,200,000 and another performance bank guarantee amounting to $53,000, both valid until the completion of the transaction," reads the complaints.

"However, instead of fulfilling these obligations, the accused misled and deceived the complainant by falsely claiming that he had already obtained the iron ore, which was allegedly stored in a warehouse at Vizag Port.”

In accordance with the agreement, the complainant company had also transferred a partial payment totaling Rs 6.57 crore from their bank accounts in Delhi to the bank account of the accused firm in Hyderabad.

“Thereafter, the complainant arranged for a ship to carry the shipment of the iron ore to its party in China from Vizag. When the ship arrived at the port, Reddy did not submit the requisite papers regarding the loading of consignment of iron ore. Due to the deliberate delays, the ship had to be discharged without performance due to non-supply of material by the accused. This caused further loss of Rs 1.77 crore to the complainant on account of detention and demurrage charges,” said the Delhi Police official.

“Subsequently, the performance bank guarantee issued by the vomplainant in favour of the Chinese buyer amounting to $1,70,000 was encashed by the latter due to non-performance of the contract, thus causing further monetary loss to the complainant company. In this way, Reddy caused a loss of more than Rs 9 crore to the complainant."

During investigation, it was revealed that the money transferred from the complainant was withdrawn in cash by Reddy.

“On verification from the office of the Principal Commissioner of Customs, Port Area, Visakhapatnam, it was informed that no warehouse was ever booked by Reddy for storing the iron ore in Vizag,” said the official.

The official said that Reddy was evading arrest and he was declared Proclaimed Offender on November 24, 2021.

Further, a reward of Rs 50,000 was also announced on the arrest of Reddy.

“Finally after gathering information about the whereabouts of Reddy, he was nabbed from Leela Nagar, Ameerpet, Hyderabad,” said the official, adding that on interrogation, the accused revealed that he had spent the cheated amount to contest the 2014 elections in which he was declared a runner-up.

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