AML Watchdog of India seized 28 immovable properties worth Rs 80.65 Crores in a case against the politician Nama Nageswara Rao.
Political Association
Nama Nageswara Rao was elected as a Member of Parliament from the Khammam Lok Sabha constituency in 2015. He represents a political party Telangana Rashtra Samiti. Earlier, he represented Telugu Desam Party.
Madhucon Projects and Nama Nageswara Rao
Before becoming a member of the Lok Sabha, Nama Nageswara Rao ran the infrastructure company Madhucon Projects. This company had interests in the construction, granite, power, and sugar industries, which employs about 10,000 people across 18 locations across the country
The National Highways Authority of India allocated the work to Madhucon Project Ltd on March 18, 2011. A special purpose vehicle, Ranchi Expressway, was floated for the four laning of the Ranchi-Jamshedpur stretch of 133 kilometers. The project was valued at ₹1,655 crores. A consortium of 15 banks agreed to lend ₹1151.60 crores.
The company could not repay the loans it obtained from the banks.
Additionally, he has had several brushes with controversy and allegations of corruption.
The income tax department and the Central Bureau of Investigation (CBI) have raided his offices, and he has been accused of leveraging his proximity to Telugu Desam Party Chief N Chandrababu Naidu to win business deals.
The Ranchi Expressway office-bearers round-tripped ₹50 crores, diverted ₹22 crores, claimed ₹98 crores as maintenance, and used ₹94 crores as mobilization advance, as alleged by the Serious Fraud Investigation Office
Assets of Nama Nageswara Rao
The promoter and director of the Madhucon Group, Nama Nageswara Rao, is also a personal guarantor of Ranchi Expressway’s bank loan. ED seized the group’s registered office and a residence in Jubilee Hills, Hyderabad. Jubilee Hills is considered one of the richest localities in the country.
Immovable assets worth Rs. 67.08 crore, located in Hyderabad, Khammam, and Prakasham District, and movable assets worth Rs. 13.57 crore, including Mr. Nama Nageswara Rao and his family members’ shareholdings in Madhucon Projects Ltd, Madhucon Granites Limited, and other Madhucon group of companies, totaling Rs. 80.65 crores, have been identified and attached by the ED.
Even before this, in July 2022, the ED had also provisionally attached 105 immovable properties and other assets valued at Rs. 73.74 crores that belonged to the Madhucon Group of Companies and its directors and promoters, including the properties of Madhucon Projects Limited and group companies, Nama Nageswara Rao. This was done after conducting numerous searches and gathering numerous statements from promoters, subcontractors, and bankers.
The ED discovered that the promoters of the Madhucon Group siphoned off the loan funds for this project by taking the entire contract from its SPV (Special Purpose Vehicle), taking enormous mobilization and material advances, and then using those advances in their other projects rather than using them for the desired purpose.
Shell Companies used in Money Laundering
Additionally, a total of Rs. 75.50 crores in direct cash was produced by paying money and then receiving it back through six shell entities. This was part of the well-orchestrated money laundering scheme
- Usha Projects
- Shree BR Visions
- Sri Dharma Sastha Constructions
- Sree Nagendra Constructions
- Ragini Infrastructure
- Varalakshmi Constructions
All of these companies were entirely under the control of their chairman, Mr. Nama Seethaiah.
These subcontractors took large advances from Madhucon Projects from the loan funds and then paid back enormous sums to Madhucon Group. Money was paid back on the pretext of rental for equipment and labor payments of Madhucon Group. The fact, however, was that labor did no work, and lacked sufficient expertise. Madhucon was always based in Andhra and Telangana, while the project was in North India. The Madhucon Group received the money back as a result.
The ED has discovered a direct theft of Rs 361.29 billion from Ranchi Expressways Limited’s bank loan.
