The Enforcement Directorate (ED) officials on Tuesday, 1 August, conducted raids on the business premises of former Rajya Sabha MP from the TDP, Rayapati Sambasiva Rao, in Guntur and Hyderabad in connection with a ₹10,000 crore bank loan fraud case.
Simultaneous raids were carried out by the central probe agency on the house of Rayapati Samabasiva Rao’s relative Malineni Sambasiva Rao and his companies in Hyderabad.
The ED’s crackdown on Rayapati Samabasiva Rao and Malineni Samabasiva Rao was based on information that the former reportedly diverted money to Malineni’s companies in violation of norms.
Investigation based on CBI FIR
The ED launched an investigation against Rayapati Samabasiva Rao and Malineni Samabasiva Rao based on an FIR issued by the CBI in 2019 for allegedly defrauding some banks after availing loans from them.
The CBI’s probe unearthed several irregularities committed by Rayapati Sambasiva Rao’s company, Transstroy India Limited, which was mainly into infrastructure projects, especially the construction of highways, bridges, and tunnels.
The ED officials, who booked a case under the Prevention of Money Laundering Act (PMLA), conducted raids at 15 different locations at Jubilee Hills, Banjara Hills, Puppalaguda, and Madhapur in Hyderabad, as also in Guntur.
According to ED sources, Rayapati Sambasiva Rao, who was a promoter of Transstroy India Limited, which was established in 2001, duped Union Bank of India by taking a loan of approximately ₹10,000 crore.
Diverted funds illegally
The amount was allegedly diverted to his close relative Malineni Sambasiva Rao’s companies, in violation of norms, according to the ED.
Malineni Sambasiva Rao is the director for Transstroy Power Projects, Techno Unique Infra-tech Private Limited, and Kakatiya Crystal Power (India) Limited, ED sources said.
In 2019, the Bengaluru unit of the CBI booked cases against Rayapati Sambasiva Rao under Sections 120B read with Sections 420, 406, 468, 477 (B), Prevention of Corruption Act, 1988 along with Sections 13 (2), read with 13 (1) (d) for duping the bank.
Based on FIR, the ED registered a case under PMLA and is probing it.
In addition to the PMLA case, the case related to Foreign Exchange Management Act (FEMA) is also being probed.
