ED summons ex-union minister & TDP MP Y S Chowdary in bank loan fraud case

The ED said it has conducted searches in eight locations, seven in Hyderabad and one in Delhi

The Enforcement Directorate (ED) has summoned former Union minister and TDP MP Y S Chowdary for questioning on Tuesday in connection with alleged multiple financial irregularities, including the defrauding of banks to the extent of Rs 57 billion.
 
The ED said it had conducted raids in eight locations, seven in Hyderabad and one in Delhi, including the residence of Sujana Chowdary (as the former minister is popularly known), besides the offices of his Sujana Group of companies and other places on Friday, following a trail in an ongoing investigation.
 
The agency has declared that its officials have seized six high-end cars such as Ferrari, Range Rover, Mercedes Benz from Chowdary's residence as they were found registered under the name of dummy companies. Y S Chowdary was the Union Minister of State for Science and Technology in the NDA government, headed by PM Narendra Modi till he quit after Naidu decided to sever ties with the BJP at the Centre.

 

The country's premier financial investigative agency said it had stumbled upon this fraud while conducting investigating into three FIRs registered by CBI and other agencies against Best & Crompton Engineering Project Limited, Chennai, (BCEPL) based on complaints from three banks involving an alleged loss of about Rs 3.64 billion in loans in the past.
 
Considered to be an important person in Andhra Pradesh chief minister N Chandrababu Naidu's inner circle, Y S Chowdary was the Union Minister of State for Science and Technology in the National Democratic Alliance (NDA) government, headed by Prime Minister Narendra Modi till he quit along with his party colleague and Civil Aviation Minister P Ashok Gajapathi Raju in March this year after Naidu decided to sever ties with the ruling BJP at the Centre.

 
The country's premier financial investigative agency said it had stumbled upon this fraud while conducting investigating into three FIRs registered by CBI and other agencies against Best & Crompton Engineering Project Limited, Chennai, (BCEPL) based on complaints from three banks involving an alleged loss of about Rs 3.64 billion in loans in the past.
 
The consortium of three banks-Central Bank of India (Rs 1.33 billion), Andhra Bank(Rs 710 million) and Corporation Bank (Rs 1.59 billion) complained to CBI that that BCEPL had obtained loans by falsification of accounts and submission of false statements.
 
As part of the investigation into these complaints under the Prevention of Money Laundering Act (PMLA), the ED, Chennai, had first conducted searches on October 8, 2018 at the residential and office premises of the key officials of BCEPL at Chennai, Bangalore and Hyderabad and found that that the company was a part of Sujana Group owned by Y S Chowdary. During these previous searches the investigating officials have recovered 126 rubber stamps of various shell companies from the business premises at plot no.18, Nagarjuna Hills, Hyderabad, the headquarters of Sujana Group, according to a statement issued by the ED.

 
ED further stated that the BCEPL along with other group companies of Sujana Group were functioning under the chairmanship of Y S Chowdary, a sitting MP representing Telugu Desam Party.
 
"Investigations revealed that all the directors of various Sujana Group companies act under the instructions of Y S Chowdary, which is evidenced by the email correspondences and communications recovered from the business/ residential premises of directors of BCEPL Further, in their voluntary statements tendered under Section 50 of PMLA, directors of BCEPL had inter alia stated that Y S Chowdary is the person responsible for the entire activities of Sujana Group of Companies and that they all have acted/rendered their signatures on the insistence of Y S Chowdary, either directly or through CFO and CS of Sujana Group of companies and that they are namesake directors and as such they had no idea as to how the funds of BCEPL were utilised and that the entire operations/ transactions of Sujana Group of companies are known only to above key persons," ED statement said.

 
In the light of the above revelations, the ED has further conducted the searches, which revealed that the banks have been defrauded by the group companies to the tune of more than Rs 57 billion. During these searches the investigative officials also found that already there were several FEMA/DRI/CBI cases were existing against the group companies.
 
The ED claimed that it has recovered documents related to forex transactions of the group companies and the documentary evidence indicates that those running the group were controlling over 120 companies, most of them were only on paper without any genuine business activities. Certain loans to the group companies were sanctioned against the personal guarantees extended by Y S Chowdary, according to ED.

 
Earlier in the day Suja Group in a statement said ED officials from Chennai had visited the office in a ten-year-old case and the company has provided all the information sought by the agency pertaining to this case. Chowdary, was nominated twice to Rajya Sabha by Naidu and became minister in Modi Cabinet.