Under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, the Directorate of Enforcement (ED) has provisionally attached immovable properties with a market value of Rs. 207 Crore in various locations throughout Tamil Nadu. The case involves financial fraud perpetrated by the Neomax group of companies, based in Madurai.
The Economic Offences Wing (EOW) in Madurai received complaints from investors alleging that Neomax Properties Pvt. Ltd. and its Group companies had deceived them into depositing large sums of money for various projects (plot development) with the promise of high returns, only to end up with 12% to 30% interest. These complaints prompted the ED to launch an investigation. However, they haven’t kept their word.
Following an ED investigation, it was discovered that the Neomax group of companies had embezzled hundreds of crores in public funds by using them to fund shell companies, group companies, and other entities (outside the group). Additionally, the ED investigation found that the Neomax group of companies had falsified their books of accounts in order to hide the proceeds of criminal activity. The group’s auditor had also admitted as much in his statement.
Additionally, it was discovered during the investigation that the Neomax group of companies had transferred a sizeable sum of public funds to entities outside the group for the purpose of buying land, and that these immovable properties were still in the possession of those other entities. The Neomax group of companies’ books of accounts were also found to have been manipulated by the ED investigation in order to hide the proceeds of crime, and the group’s auditor admitted as much in his statement.
Additionally, it was discovered during the investigation that the Neomax group of companies had transferred a sizeable sum of public funds to entities outside of the group in order to purchase land, and that these immovable properties were still in the possession of those other entities. The investigation also showed that the Neomax group of companies generated the proceeds of crime for these land parcels and projects. As a result, the ED temporarily attached real estate worth Rs. 207 Crore that the Neomax group of companies had parked in the names of other entities. Additional research is currently being conducted.
