Sujana defrauds banks to tune of `5,700 crore
ED says money pumped into 120 shell companies
The Sujana Group of Companies, headed by its chairman, former Union minister Y. Satyanarayana Chowdary, has allegedly defrauded banks to the tune of `5,700 crore, the Enforcement Directorate has found.
The money was found to have been pumped into 120 shell companies that had ghost address and no business activities. Mr Chowdary is a confidant of AP Chief Minister N. Chandrababu Naidu.
An eight-member EDChennai team that raided the residence and office of Mr Chowdary seized six luxury cars including a Ferrari, a Range Rover and a Mercedes Benz and crucial business documents.
The alleged fraud was detected when the Central Bureau of Investigation’s banking security and fraud cell at Bengaluru registered three FIRs based on complaints from three banks stating that the total loss caused to the consortium of banks was `364 crore by M/s Best & Crompton Engineering Projects Ltd, Chennai (BCEPL).
The company had obtained loans from these banks by falsification of accounts and submission of false statements. The sum included `133 crore of the Central Bank of India, `71 crore of Andhra Bank and `159 crore of Corporation Bank.
Based on these FIRs, investigations under Prevention of Money Laundering Act (PMLA) were initiated by EDChennai.
As part of these investigations, the ED on October 8 had conducted searches on Mr Chowdary’s residence and the offices of key officials of BCEPL at Chennai, Bengaluru and Hyderabad.
During the searches, certain incriminating documents were seized for further investigation. Searches resulted in the recovery and seizure of 126 rubber stamps of shell companies from the business premises at Plot No.18, Nagarjuna Hills, Punjagutta. It was identified that the same premises accommodated many companies of the Sujana Group.
An ED official told this newspaper: “Verification conducted with the seized documents indicated that BCEPL along with other companies of the Sujana Group were functioning under the chairmanship of Y.S. Chowdary alias Y. Satyanrayana Chowdary alias Sujana Chowdary. Investigations revealed that all directors of the Sujana group companies act under the instructions of Y.S. Chowdary, which is evidenced by the email correspondences and communications recovered from the business and residential premises of directors of BCEPL.”
“Further, in their voluntary statements tendered under Section 50 of PMLA, directors of BCEPL had inter alia stated that Mr Chowdary was the person responsible for the activities of the Sujana group and that they had affixed their signatures on the insistence of Mr Chowdary, either directly or through the chief financial officer and company secretary of the group,” the official said.
The Sujana Group of Companies, headed by its chairman, former Union minister Y. Satyanarayana Chowdary, has allegedly defrauded banks to the tune of `5,700 crore, the Enforcement Directorate has found.
An ED official said they were namesake directors and had no idea of how the funds of BCEPL were utilised. The transactions of the group were known only to the key persons, he quoted the company officials as saying.
In the last 24 hours, searches were conducted at eight locations — seven in Hyderabad and one in Delhi
THE DOCUMENTS indicated that there were over 120 companies and most of them are non-operating or companies on paper without genuine business activities.
— on the Sujana group which yielded documents that revealed that the banks had been defrauded by the group companies to the tune of more than `5,700 crore.
In another premises, documents recovered revealed that there were Fema/ DRI/ CBI cases against the group companies. Documents related to forex transactions were also seized.
The documents indicated that there were over 120 companies and most of them are non-operating or companies on paper without genuine business activities.
Preliminary indications were that certain loans to group companies were sanctioned against the personal guarantee of Mr Chowdary.
At his residential premises, the six high-end cars were found registered in the name of dummy companies.
These vehicles have been seized under the provisions of PMLA. Mr Chowdary has been asked to join further investigation by issuing summons for his appearance on November 27.
Responding to the ED raids, Sujana Group of Companies, denied rumors of lookout notices against the chairman Mr Sujana Chowdhary.
“Sujana Group has provided all the information as required by the ED. While these are the facts, there is a widespread rumour that lookout notices are issued against the directors of Sujana Group, which is a false. Sujana Group condemns this rumours,” an officials release said. They also denied the rumours that officials misbehaved with media personnel (during the searches).
Y. Sujana Chowdary quit as a Union minister in March after the fallout of TD with the NDA-led government.
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