In­flated de­posits by con­trac­tors, real­tors

Financial Chronicle - - PLAN, POLICY -

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.

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