TdP mP SuJANA ChowdARY loSES Ed FIGhT IN dElhI hC
The HC directed him to appear before the Enforcement Directorate on Monday.
possibility of his getting any relief as the top court will be closed during the weekend. Otherwise, he will be arrested by the ED, which might be a big embarrassment to the TDP ahead of the Telangana Assembly elections on 7 December.
Chowdary’s argument is that as the Andhra Pradesh government had withdrawn its general consent to the CBI on 8 November, all cases registered by the investigating agency would be stalled and as the particular case against Sujana Group of companies, too, was initially filed by the CBI’s Bangalore office in the first week of October, its follow-up probe by the ED, too, would be illegal.
However, there is no clarity from the CBI on this issue as the agency’s legal experts are studying the fate of the ongoing cases, in case a state withdraws its general consent. As per the Delhi Special Police Establishment Act 1946, under which the CBI was set up, general consent from a state is needed to register and probe cases in its jurisdiction.
It is not clear what would happen to the fate of ongoing cases before the CBI even if a state takes back its general consent if the cases involve criminal breach of trust and cheating, some of the provisions of Indian Criminal Procedure code. Unless the CBI’s prosecutors too agree, the courts might not allow stalling of investigation in a case filed by the CBI, sources in the premier investigating agency said.
The Delhi HC’s directive on Friday rejected the argument of the AP government and that of the TDP that the ED cannot proceed further in cases filed by the CBI in the state in the wake of its withdrawal of the mandatory general consent to the agency. If so, the CBI and ED might go ahead with around 20 cases booked in Andhra.
The ED on 23 November carried out raids on the Sujana Group of companies owned by him at eight places, seven in Hyderabad and Chennai and one in Delhi, and found that the former Union minister had cheated the banks to a tune of around Rs 5,700 crore. The ED had booked cases against him under the Prevention of Money Laundering Act (PMLA), among other laws.
The ED’s raids were a follow-up of a case filed by the CBI, Bangalore, in October based on a complaint lodged by a consortium of three banks that they were defrauded to the tune of Rs 364 crore by the Sujana Group of companies owned by the former Union minister. The three banks—Central Bank of India, Rs 133 crore; Andhra Bank, Rs 71 crore and Corporation Bank, Rs 159 crore—lost to the companies.
This entire amount is raised by Best & Crompton Engineering Projects Private Limited, also owned by the Sujana Group in Chennai. Usually, the CBI seeks the assistance of ED in cases where money laundering and cheating of banks and financial institutions were involved. The Income Tax department has also been urged by the CBI to probe this case.
After its raids on the Sujana Group of companies last week, the ED in a release had stated that the group directly controlled and monitored by Chowdary, who was in the BJP-led NDA government as the minister of state for science and technology till March this year, had cheated the banks to the tune of total Rs 5,700 crore, through a bunch of shell companies.
The ED had found that at a single building at Punjagutta in Hyderabad, the group had as many as 120 shell companies which had common addresses. The group, in all, had raised around Rs 9,500 crore loans from the banks and financial institutions since 2008. Of them, Sujana Universal had raised Rs 1,104 crore, Sujana Towers Rs 3.113 crore and Sujana Metals Rs 3,286 crore.
ED officials had found that while most of the companies that raised loans from the banks had run into deep losses, those held by him and his family member were in profits, indicating that there was huge laundering of funds from the public institutions. The ED had collected affidavits from the directors of some of these shell companies under Section 50 of PLMA.
Chowdary, however, had rejected the charges of ED and stated that the agency cannot come to a conclusion based its preliminary investigation. He said in a statement that ever since he became a Union minister four years ago, he had ceased to be a director in any of the companies owned by the Sujana Group. He had claimed that the Sujana group was a law abiding one in its history of 25 years.
Opposition YSR Congress had alleged that Chief Minister Chandrababu Naidu had withdrawn the AP government’s general consent to the CBI, only to stop investigation into the Sujana Group of Companies and to save the skin of his trusted lieutenant Chowdary. Now, it is to be seen whether Chowdary appears before the ED in Chennai on Monday.