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Multiple premises raided by ED in money laundering case against GVK, MIAL

By Saumya Srivastava      29 July, 2020 10:04 PM      0 Comments
ED money laundering GVK Group MIAL

On Tuesday (28th July) the Enforcement Directorate (ED) raided multiple locations related to a money laundering case against GVK Group, Mumbai International Airport Limited (MIAL), and others for probing of the alleged irregularities of Rs 705 crore in running the Mumbai Airport. 

Nine locations in Mumbai and Hyderabad were raided under provisions of the Prevention of Money Laundering Act (PMLA) with the aim of collecting evidence.

An official said that offices of GVK Group, MIAL, and the premises of GVK Group promoters were raided. 

An enforcement case information report, which is equivalent to a police FIR, was filed earlier this month by the central probe agency under PMLA after the study of a recent Central Bureau of Investigation (CBI) First Information Report (FIR) that was filed against the same entities.

It is being probed if genuine funds were laundered to amass personal assets by the accused by the illegal routing of funds.

The ED and CBI cases are concerned with alleged siphoning off Rs 705 crore from the MIAL funds, a joint venture under public-private partnership (PPP) between the GVK Airport Holdings Limited and the Airports Authority of India (AAI), besides other investors, by showing inflated expenditure, under-reporting of revenues, fudging of records, among others.

Gunupati, a director in MIAL, his son GV Sanjay Reddy, managing director at MIAL, the companies MIAL, GVK Airport Holdings Limited (a GVK group company) and nine other private companies that were allegedly used to camouflage inflated figures through sham deals and unidentified AAI officials have been booked by CBI.

MIAL and AAI entered into an agreement on 4th April 2006, for the modernization, upkeep, maintenance, and operation of Mumbai Airport. 

CBI has said that the promoters of GVK Group in MIAL along with their executives and unidentified officials in AAI allegedly siphoned off funds in multiple ways.

After CBI filed its FIR, it carried out raids in Mumbai and Hyderabad too.

It was alleged by the CBI that the accused siphoned off the money by showing the execution of bogus work contracts to nine companies in 2017-18, showing a loss of Rs 310 crore.

The reserve funds of MIAL around Rs 395 crore have been allegedly misused by GVK Group promoters to finance their group companies. 

It has also been alleged by the CBI that the group inflated the expenditure figures of MIAL showing payments to their employees at the headquarters and group companies, who were not involved in the running of MIAL, which caused a revenue loss to AAI.

The revenue earnings of MIAL have allegedly been under-reportedly entering into contracts with related parties and meeting their personal and family expenses using MIAL funds.

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