In connection with the bank fraud case involving M/s Servomax India Private Limited, the Directorate of Enforcement (ED) has temporarily seized 15 moveable properties totaling more than Rs 13.51 Crore. Directors P Chandrashekhar Reddy and A V Rao’s families and their benamidars are the owners of the linked assets.
Based on a FIR dated 02.02.2018 filed by the CBI under various IPC sections against M/s Servomax India Private Limited (SIPL), its promoters/directors Venkateswara Rao Avasarala, Poreddy Chandrasekar Reddy, Director & others for alleged cheating and defrauding Public Sector Banks to the tune of Rs. 402 Crore, the ED launched a money laundering investigation.
According to the ED investigation, SIPL obtained loans from a group of banks, including working capital loans, bank guarantees, and letters of credit, but diverted the funds, did not utilise them for what was intended, and did not pay back the loans. Fund trail analysis showed that the company had been issued LCs in the names of its related shell entities and, without the supply of any material, had the LCs discounted. The proceeds of the LC discounting were then routed back to the company, where the promoters used them for their own benefit or as share capital or a loan to expand their businesses.
Additionally, money was taken out through the accounts of its petty employees and in cash. Two benamidars, Atluri Prasad and J. Rajesh of M/s Maruthi Travels, acknowledged to laundering the profits of the crime during the inquiry. The accused promoters were able to detach POC and buy assets in the names of their family members and benami companies despite the NCLT liquidating SIPL.
On March 14, 2022, the ED attached 15 landed properties in and around Hyderabad under the PMLA. A V Rao was previously detained under the PMLA on January 17, 2022, and is now in judicial detention. Additional investigation is being conducted.
