On November 21, 2023, the Directorate of Enforcement (ED) conducted searches in four Telangana sites by the terms of the Foreign Exchange Management Act (FEMA), 1999. The searches were carried out at Dr Gaddam Vivekanand’s house in Hyderabad, as well as the offices of Visaka Industries Ltd. in Hyderabad and Vigilance Security Services Pvt. Ltd. in Ramagundam.
Searches were also carried out at his temporary house in Hitech City, Mancherial, where he was discovered. The ED launched an inquiry after receiving a referral from Telangana Police to look into an Rs. 8 crore transaction from Dr Gaddam Vivekanand’s bank account to M/s Vigilance Security.
An ED investigation found that Dr Gaddam Vivekanand, his wife, and their firm Visaka Industries made transactions with M/s Vigilance Security totaling more than Rs. 100 crore. In its most recent balance statement, the firm recorded just Rs. 20 lakhs in ‘ revenue from operations,’ while it reported assets totalling Rs. 64 crore, mostly in the form of long-term loans/advances. Credit and debit transactions in the company’s disputed bank account totalled more than Rs. 200 crore since its establishment. The investigation also uncovered Dr G. Vivek’s indirect influence over M/s Vigilance Security.
The ED inquiry also showed, on the surface, FEMA violations by M/s Vigilance Security Services Pvt. Ltd. and its parent business Yeshwant Realtors, the bulk of which is owned by a foreign citizen. FEMA infractions were also discovered in Dr Gaddam Vivekanand’s formation of an organization in a foreign tax haven jurisdiction.
The recovery and confiscation of digital devices and damning papers revealing suspicious/unaccounted transactions totalling many crores, as well as the usage of unaccounted monies in property dealings, emerged from search operations. Seized records also revealed large-scale Inter-Corporate Deposits inside group firms with no viable business but vast property holdings. Searches further revealed the phony nature of M/s Vigilance Security Services Pvt. Ltd., which was discovered to be non-existent at its stated addresses.
