ED Raids Hyderabad Locations in ₹621-Crore Bank Fraud Case
Probe Agency Freezes Accounts, Alleges Fund Diversion in Highway Project
- The Enforcement Directorate conducted raids at six Hyderabad locations in a ₹621-crore bank fraud case.
- The investigation targets SEW LSY Highways Limited and its associate firms.
- The case stems from a CBI FIR alleging siphoning of loan funds and criminal misconduct.
GG News Bureau
Hyderabad, 24th July: The Enforcement Directorate (ED) on Tuesday conducted extensive searches across six locations in Hyderabad in connection with a ₹621-crore bank-fraud case. The investigation targets the promoters and directors of SEW LSY Highways Limited and its associate firms, following an FIR registered by the Central Bureau of Investigation (CBI).
The CBI’s FIR accused SEW LSY Highways Limited and others of allegedly siphoning off loan funds, cheating, and criminal misconduct, leading to significant losses of public money. The ED’s raids specifically targeted SEW Infrastructure Limited (SIL), Prasad & Company (Project Works) Private Limited (PSPWPL), their group firms, and their directors.
SEW LSY Highways Limited was established as a special purpose vehicle (SPV) to execute a highway project assigned by the Uttar Pradesh State Highway Authority to a consortium of SIL and PSPWPL. This project was backed by a ₹1,700-crore term loan from a consortium of 14 banks, led by Punjab National Bank, from which ₹603.68 crore was disbursed.
The ED’s probe has uncovered an alleged complex scheme involving intra-group sub-contracting. Work was purportedly passed on at successively lower values, primarily through SEW Transport Networks Ltd (STNL) and then to PSPWPL. The agency alleges that a portion of the loan funds was diverted to PSPWPL, which then illicitly infused these funds back as the promoters’ contribution, in direct violation of the original loan conditions.
“However, the project was not completed and the term loan became a non-performing asset, resulting in an outstanding amount of ₹621.78 crore to the banks,” the ED stated.
During the search operations, the ED also froze 33 bank accounts belonging to SEW Infrastructure Limited, as well as their directors and relatives. SEW Infrastructure Ltd., founded in 1983 by Vallurupalli Nageswara Rao, is based in Hyderabad. Further investigation into the matter is ongoing.
