Inflated deposits by contractors, realtors
Bangalore-based contractors’ ways
Two major civil contractors of Bangalore who undertake state government civil contract works from irrigation and other departments, were alleged to have engaged in massive inflation of expenses and investment of unaccounted income in purchase of immovable properties. Discreet enquiries revealed that they were helping in conversion of unaccounted cash in SBNs held by others after November 8. Search revealed that money was transferred to related entities through the banking system and subsequently received back in cash. At one place, bank passbooks of 34 people were found. The managing director of the group company accepted that these accounts were used to generate cash and the accountholders were mere name-lenders. He also accepted several bank accounts were opened in the names of subcontractors, many of whom were relatives or friends of the directors. These bank accounts were used to withdraw cash for inadmissible and non-business expenses. A sum of Rs 1.96 crore in SBNs, belonging to the group, was also seized from the residence of a close friend of MD. The group also paid nearly Rs 1.3 crore in SBN to labours on November 8 and booked it as labour expenses. The search led to seizure of Rs 4 crore cash and valuables and admission of Rs 167 crore as undisclosed income.